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The ATO has revealed it wants to ditch compulsory tax returns for individuals with straightforward tax affairs.
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ATO sets sights on ending compulsory returns
23 September 2015
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In comments made to AccountantsDaily, Geoff Leeper, second commissioner at the ATO, said he hopes increased automation in the tax system will erase the need for many individuals to complete a tax return.
“From a customer service point of view and a taxpayer point of view, we think it would be great if people with really simple tax affairs were able to, at some point, not have to worry about filing a tax return, because everything they did, their interests and their dividends, are all visible,” he said.
“I think for people with very simple affairs who don’t want to run deductions, we could get pretty close to it, I think – quite quickly.”
However, according to Mr Leeper, in order for such changes to be implemented, the current process of reporting deductions must be re-evaluated by the government in order to improve the system.
“(The) government would need to focus on what it was prepared to do to make the deductions side of tax easier,” he said.
“On the income side – income, interests, and dividends – we can pretty well tell you right now what sort of relationship you’ve got with government in that space. What we don’t know though is what deductions you have.”
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Mr Leeper alluded to the UK tax reporting system, implying that Australia could adopt a similar system whereby taxpayers “accept an offer of a certain amount of deductions, no questions asked”.
He added that adopting similar systems could carry implications for tax collections that must be examined by the government, not the tax office.
“The previous government did have a proposal at one stage to give people a flat amount for certain deductions, no questions asked. That was going to cost a fair bit of money so that’s really a policy question for the government to consider," Mr Leeper said.
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