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The Inspector-General of Taxation (IGT), Ali Noroozi, has detailed the terms of reference for his review into the ATO’s employer obligations audits.
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IGT outlines terms of reference for ATO audit overhaul
29 October 2015
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The IGT has called upon stakeholders for submissions regarding key areas of concern relating to the taxation and legal obligations for employers at both federal and state levels.
“Employers play a vital role in the economy, including [by] collecting taxes from their employees and paying their entitlements,” Mr Noroozi said.
“It is important to provide them with as much support as possible with these obligations so that their main focus continues to be on their core commercial goals."
Key areas of concern have already been flagged by stakeholders, such as the presence of different tests at federal and state level that determine the employee and contractor distinction.
“Difficulties in determining employee or independent contractor status may give rise to large unexpected liabilities across a number of years under audit. This review will seek opportunities to improve certainty of outcomes and minimise unexpected liabilities,” Mr Noroozi added.
In addition to difficulties in definition and distinction, the conduct of the ATO as part of the employer obligations audits has also come under scrutiny.
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The IGT has identified “onerous information requests”, alongside an “unwillingness to discuss issues and practical solutions”, as key areas of concern, resulting in unnecessary compliance costs for employees.
“My aim is for balanced thinking on managing revenue risk, easing the compliance burden and achieving better outcomes for employers, employees, contractors and the ATO,” Mr Noroozi stated.
“This review will also seek further means for ensuring that employee entitlements are paid promptly,” he said.
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