SCHEDULE B – GST BUDGET AND ADMINISTRATION ACTIVITIES

B1

The Strategic Costing Framework is the ATO’s primary costing attribution method across all of its activities.

1.1.1 Policy advice and forecasting

1.1.2 Design and build administrative solutions

1.1.3 Input into law design

1.1.5 Law assurance

1.1.6 Cross-agency support and 1.1.7 Government and stakeholder relations

1.2.1 Registrations

1.2.2 Processing and accounts

1.2.3 Customer service

1.2.4 Manage payment and debt

1.2.5 Interpretative assistance

1.3.1 Marketing and communication

1.3.4 Client engagement (ATO)

1.3.4 Client engagement (Home Affairs)

1.3.5 Compliance intelligence and risk management

1.5.1 Resolve disputes

1.5.2 Prevent disputes

Program 2 – Tax Practitioners Board (TPB)

Program 3 – Australian Business Registry Services (ABRS)

TOTAL

B2 Cost information against these Program Framework deliverables may be found in the annual GST administration performance reports provided by the ATO.

B3 Changes to the ATO Program Framework are reflected in the Strategic Costing Framework activities.

B4

The GST Administration Cost Statement is a special purpose financial report. The Statement is prepared for the sole purpose of complying with the requirement in this Agreement for the ATO’s Administration of the GST for the ATO to prepare and distribute an accrual-based financial statement to the CFFR. As such, it must not be used for any other purpose.

B5

The Statement is prepared having regard to Statements of Accounting Concepts and on an accrual basis.

B6

The financial information and accounting policies used in preparing the GST Administration Cost Statement are the same as used to prepare the ATO’s annual audited Financial Statements.

B7

The costs of GST administration activities have been calculated using a model consistent with the Commonwealth Government’s accrual-based outcomes and programs framework. They represent the proportion of the ATO’s total operating expenses that relate to GST administration activities determined by using the cost attribution approach outlined below.

• The costs of GST administration activities include:
  • direct staff and related costs
  • other direct operating costs including payments to other agencies
  • business line management overhead costs which represent those costs within a line that do not directly provide line products, services or outputs but support the line as a whole
  • corporate support costs including accommodation, information technology, office services, human resource services and internal services, and
  • a proportion of corporate and business management overheads for strategic corporate direction setting (including corporate improvement initiatives), financial management, assurance and governance, and other corporate-related activity based on the total cost of GST administration activities as a proportion of total ATO costs.
   

B8

This framework deliverable focuses on the provision of advice on administrative, compliance and interpretative matters in relation to new government policy. This includes the provision of advice on costings, modelling and forecasting. It covers work done before a decision is made by government to proceed with a new policy proposal.

B9

This includes services that support the identification, development and enhancement of business practices, processes, products and systems to implement new law following a policy decision by government or other initiatives related to administration of taxation law.

B10

It supports the ATO’s role in shaping the taxation and superannuation systems through the provision of technical and interpretative advice on drafting instructions, and draft legislation and explanatory materials.

B11

This supports the interpretation and administration of laws administered by the ATO through the delivery services and systems, including the continual improvement of policy, practices and procedures, and end-to-end business processes for technical decision-making. This includes prioritisation of technical issues, and the quality assurance of technical decisions.

B12

This focuses on those activities the ATO is required to undertake by law or agreement, but which do not necessarily contribute to the ATO’s business outcome. This includes parliamentary support.

B13

All activities relating to the registration of new clients including processing and maintaining the GST client register.

B14

This includes activities involved in managing accounts, payments and processing for all products. Account management covers all activities that result in refunds and outward payments being issued, adjustments or updates to accounts.

B15

This focuses on the ATO’s customer service capability that responds to requests or enquires received through electronic, telephony or paper channels.

B16

The ATO takes a purposeful approach to payment and debt, balancing support for clients trying to do the right thing with timely, firmer, or stronger action against those who don't engage to prevent them gaining an unfair financial advantage.

B17

This focuses on the interpretative assistance provided to the community in the form of advice, guidance, and review decisions about the application of laws.

B18

Marketing and communication activities that focus on supporting the ATO’s business model. This is achieved by helping taxpayers and their advisers understand their rights and obligations, making it as easy as possible to comply, managing relationships and shaping external capabilities. Key client or relationship managers who provide case-specific or one-to-one education or advice to taxpayers to meet their obligations are not included here, but rather form part of the relevant capability.

B19

This covers the implementation of engagement strategies such as preventive activities designed to assist clients in getting their tax and super obligations correct before lodgment, and corrective activities that address identified problems with accuracy of information presented by clients and their intermediaries. These strategies influence and promote voluntary compliance on GST, including activities in categories such as:

1. Making it easy
2. How to comply
3. Review
4. Audit and enforcement
5. Investigation including initiating civil proceedings and prosecution.

B20

This includes processes associated with the discovery, detection, analysis and reporting of compliance risks at a tactical, operational and strategic level, as well as design of end-to-end risk mitigation strategies to improve voluntary compliance. Risk mitigation strategies are affected through other deliverables such as client engagement, marketing and communication, and interpretative assistance.

B21

This relates to the resolution of disputes arising from tax technical decisions, including objections, disputes and reviews. Our resolution actions include independent review, in-house facilitation, mediation, early engagement, objections and, where appropriate, taking litigation action.

B22

This includes:

• the consolidation of our independent review service and working with taxpayers and/or their representatives to identify opportunities for further improvement, and
• the provision of internal systems, processes and training, to support staff to actively pursue the prevention and early resolution of disputes.

B23

This covers the registration and regulation of tax agents, BAS agents and tax (financial) advisers.

B24

ABRS increases use by business and government of a complete and single source of business information for planning and service delivery. Work associated with processing ABN registrations and client-initiated transactions generated after registration is completed, including updates, additions and cancellations.

B25

The ATO’s GST administration activities include activities that are 100% GST-related and others where processes are shared between GST and other taxes. Where a process is shared, the costs are attributed to GST and other revenue products based on the relative consumption of the shared service.

B26

The basis used for attributing costs to GST administration activities is summarised as follows:

B27

This note sets out the agreed processes for developing and modifying budgets and business plans for the ATO’s administration of the GST.

B28

The ATO will formulate proposals for levels of funding required to administer the GST for the immediate future year. The ATO will consult with GSTAS (through GPAS) in formulating its proposals. In formulating the proposals, the ATO will review the budget methodology, associated assumptions and accuracy of data underpinning the proposals.

B29

The ATO will provide the strategic budget submission to GSTAS (through GPAS). GSTAS will consider the budget submission and forward to the CFFR, together with any comments or recommendations from GSTAS members on the appropriate level of funding.

B30

Whilst the time frames for these processes will change over time to align with Commonwealth budgetary processes, it is anticipated that GSTAS will consider the ATO’s funding submission in February each year.

B31

The strategic budget submission to GSTAS will contain an indicative view of the funding against the program deliverables of the strategic costing framework. If required, subject to ATO planning processes and impacts of the Commonwealth budget process, the ATO will provide to GSTAS (through GPAS), within the first quarter of the financial year, a revised view against the program deliverables.

B32

The ATO can raise with GPAS, GSTAS and subsequently, if necessary, the CFFR at any time during a financial year, issues that may impact on the agreed Schedule B information.

B33

The ATO will report to GSTAS (through GPAS) the actual costs incurred in administering the GST for each financial year. As per the audit arrangements in Schedule C, these costs and the basis of determining these costs are subject to independent review by the ANAO.

B34

GSTAS (through GPAS) and the Commissioner of Taxation will consult on the amount of any ex-post adjustments for the prior financial year arising from the administration costs actually incurred. GSTAS will recommend to the CFFR any agreed adjustments from the ANAO review. It is anticipated that any agreed adjustments will be settled and given effect to by February each year.

B35

The Commonwealth may publish revised estimates of the GST Administration Budget in its Budget Updates, and may adjust the monthly advance GST payments accordingly, to reduce the adjustment required after the end of the financial year.