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The Tax Commissioner has defended the ATO’s compliance approach with small business and has found that GST and PAYG trip-ups are among the most common causes of mistakes.
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ATO boss backs his dispute process as GST, PAYG clashes linger
03 September 2018
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Addressing the Council of Small Business Organisations Australia (COSBOA) National Small Business Summit 2018, ATO Commissioner Chris Jordan said that while dispute resolution was a priority for the tax office, contrary to common belief, most issues brought to his office are not technically defined as disputes.
“There has been a lot of focus on disputes and resolutions, but in fact, there are not really a lot of actual disputes on technical matters; things are generally pretty straightforward.
“We need to understand that disputes get thrown around a lot as a term, but often it is just ‘I owe you money and I don’t have it. How can we sort this out?’
“In small business, the word ‘dispute’ is often interchanged with ‘misunderstanding’. A third of all these disputes were fixed in a one call with a facilitator — 30 per cent in one phone call because it was a misunderstanding.”
According to Mr Jordan, “disputes” or misunderstandings commonly occur when small businesses fail to comply with their GST or PAYG obligations.
“If you don’t make any profit, you don’t pay tax and that makes sense, but you do withhold money from salaries, you do collect GST, you do have an obligation to pay super, and Australia is not the longest but the second longest period of time in the world where you can collect something and not pay it,” Mr Jordan said.
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“So, if you collect GST on the first day of order, you’ve got a whole three months plus 28 days after that, and where we have some strife with businesses is they put in a BAS and acknowledge all that but they don’t pay.
“Is that a dispute or really just owing money?”
Restoring trust
Mr Jordan also acknowledged the need for the ATO and “other large institutions” to rebuild trust and confidence within the industry, alluding to the ongoing Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, and allegations into the ATO’s debt recovery actions.
“I think, frankly, our community has an all-time low trust and confidence in large institutions. I’m not just talking about the tax office; I’m talking across the board,” Mr Jordan said.
“What you will see from us over the next few years is more about the trust and confidence, more about how we can streamline things and have an integrated approach to how we deal with people and how we can use data for your benefit — so, how we can use your natural systems where you have got lumpy cash flows: how do you pay tax when you got the money and how do you not pay anything when you don’t have the money.
“Yes, we are the tax collector, but we are also there to help facilitate people through a very complex system.”
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