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Faster error detection, easier calculation of PAYG instalments and encouraging more frequent reporting are some of the Tax Office’s focus areas for creating a more digitalised future for small business.
ATO outlines current focus areas for tax 3.0 plans
14 March 2025
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8 minute read
The ATO has provided an update on its blueprint for creating a more streamlined, digitalised tax experience, called Tax Administration 3.0, which aims to make it easier for small businesses to meet their obligations.
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Speaking at an event yesterday, Michael Morton, assistant commissioner at the ATO, said creating an easier digitalised tax experience for small businesses would help prevent debt, reduce cost and compliance burdens and ensure businesses have certainty that they're meeting their tax obligations correctly.
Morton said moving towards a digitalised future would not be a single leap for the ATO but rather a "multi-step, multi-journey approach requiring incremental advancements and continual adaption".
In a session at the Accounting & Business Expo 2025, Morton said the ATO was currently focused on encouraging more frequent reporting of tax obligations. This was driven by insights from pilots and engagements undertaken by the Tax Office.
The ATO was also investigating what role digital solutions can play in enabling small businesses to quickly identify and address errors and mistakes before lodgment.
"We are [also] focused on how we can better use third party data to support small businesses get it right from the start," Morton said.
The ATO was also exploring and researching how future changes in Australia's payments landscape can streamline and transform the tax payment experience for small business, he added.
It was also looking at how it can make it easier for small businesses to calculate their PAYG instalments through software.
Engagement from tax profession, small business sector
Morton said the Tax Office would continue to engage with the accounting and tax profession to design and build a future digitalised tax experience and has already heard from a range of stakeholders across the ecosystem.
"We have been engaging with representatives of tax and BAS professionals, small business, digital and financial technology providers, and professional associations to work towards blueprinting a future digitalised tax experience for small businesses and publishing a multi-year rolling roadmap that outlines how we plan to bring this future tax experience to life."
Small businesses and key stakeholders across the small business ecosystem indicated that they want to have confidence in the broader tax system. Small businesses want fairness, a level playing field and deliberate behaviour to be addressed, he explained.
Small businesses and tax professionals also wanted greater certainty and assurance that they were getting their tax obligations right so that they were able to proactively identify and address mistakes without being penalised.
The sector also wanted contemporary, modern solutions where interactions are simple and easy, along with predictable ATO treatment and clear consequences where there is non-compliance.
Small businesses and tax professionals also wanted a tax system where taxpayers have choice and control on how they engage.
Morton said the ATO wanted to hear ideas and thoughts from small businesses and tax professionals on how digital tools and solutions help improve record-keeping practices of small businesses and what role the accounting and tax profession would play in the future.
The Tax Office asked for ideas on how digital tools and solutions could help small business better navigate complexities in the tax system or have different and timelier conversations with their trusted advisers.
"We want to hear from you and encourage you to share your thoughts and ideas with your professional associations or reach out to us directly," Morton said.
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