Welcome and introductions
The new ATO co-chair, Deputy Commissioner Hector Thompson, introduced himself to members and with external co-chair Andrew Howe welcomed members and guests, including state and territory representatives from South Australia and the ACT. Conflicts of interests were canvassed, none declared.
Members raised the need for clarity when it comes to confidentiality of meeting packs and other communications from the ATO, namely which topics and papers can be shared and with whom. The ATO committed to clearly communicating what can be shared publicly, as well as what members can share with their association members.
Budget – GST funding, revenue and Compliance Program
The ATO took members through the GST-related measures and collection figures announced in the May 2023 Federal Budget. In particular, the ATO outlined the aims of the 2023–27 GST Compliance Program, which is expected to deliver an additional $3.8 billion in GST revenue to states and territories over this period, at a cost of $588.8 million. The GST Compliance Program has been ongoing since 2010.
The Contemporising GST Risk Models Project was also discussed. This project focused on developing new GST risk models as part of the 2019–23 GST Compliance Program. It exposed many of the fraudulent practices highlighted through Operation Protego.
The ATO said it was working through a range of logistical issues surrounding the increased Budget funding for additional work programs and has increased its graduate intake to bring extra people on board.
There was general discussion on the issues of GST registrations and grouping, particularly surrounding the lodging and processing of grouping forms. The ATO said it would examine these issues to see what could be done to improve things.
Private Wealth’s GST focus 2023–24
The ATO took members through its targeted industry approach, focusing on retail, construction and retirement village industries.
The retail and construction industries are the 2 most significant industries for GST activity and were both impacted by the COVID-19 pandemic. Retail experienced rapid growth and an increased reliance on online sales while construction contracted.
The ATO is continuing with a broader review of issues impacting retirement villages with a focus on developing a greater understanding of industry operating models including new business models that are emerging.
The ATO will continue to invest in GST correct reporting, Top 500 engagements and refund integrity work.
Member comments
Members asked if not-for-profit retirement village operators are also being looked at and, if so, are their information needs any different. The ATO said it is looking across the board and taking a group approach.
Members noted that the movement of data to the cloud and a focus on cost-cutting by digital service providers, with many based offshore, might lead to a reduction in the length of data retention. This means that data may only be available to third-party agencies like the ATO for 12 months or so. The ATO noted that this topic will be discussed at the next Tax Practitioner Stewardship Group meeting.
Improve small business tax performance
The ATO updated members on progress with the corporate initiative ‘Improve small business tax performance.’ The current focus is on pilots with the aim to place greater confidence and certainty in the system, increase digitisation to reduce errors and mistakes, and decrease new debt as payments move closer to events.
The pilots underway are:
- right time GST payments
- monthly GST reporting
- building confidence and certainty into natural systems.
Another pilot, planned to start in October 2023, is on monthly PAYGW reporting.
The ATO explained that the building confidence and certainty into natural systems pilot involved working with digital service providers on developing tips and nudges that can help taxpayers and advisers proactively fix errors and mistakes.
The pilot is looking to establish a framework for how we treat risks upfront in the digital tools that a small business uses. The ATO welcomes members of the GST Stewardship Group in helping to identify parts of the GST administration that could be suitable for this.
Member comments
Members asked whether people were likely to stay with monthly reporting after the pilots had finished or go back to quarterly reporting. The ATO said some people had told them that more regular GST payments had improved their mental health and improved their fiscal discipline.
There was general discussion about how a move to monthly lodgment could be a good way to reduce new debt. The ATO said it is testing whether any increase in business costs from monthly reporting and payment is offset by benefits from better record-keeping and business management.
Members asked whether any clients in the pilots were still doing paper business activity statements (BAS) and whether the pilot proposals were dependent on businesses completing digital BAS.
The ATO said it will come back to the stewardship group in 2024 to talk about the outcomes and learnings from the pilots.
Community and industry insights round table
Members provided feedback and insights on a range of topics. These included the ATO’s incorporation of ChatGPT and other artificial intelligence (AI) tools. The ATO said it is looking into opportunities that may exist to use AI as well as how these tools can be used for fraud.
Members discussed justified trust and its focus on areas where companies may be underpaying tax. The ATO confirmed it looks at areas where it thinks a higher level of assurance is needed.
There was general discussion regarding the upcoming industry engagement and feedback on food classification matters. Similar engagement on medical and health supplies is being considered.
Members discussed microbusinesses’ low level of understanding of their tax obligations and the help provided by tax clinics such as the one at the University of New South Wales. There will be further, dedicated discussion on microbusinesses at a future stewardship group meeting.
Members asked about the ATO’s changing approach post-COVID-19 to debt collection and payment plans. The ATO said that its approach is tailored and differentiated for each client, with payment plans available. A Lodge and Pay representative will come to a future meeting to talk about the ATO’s approach.
Members asked for clarity on the ATO’s service offerings for large businesses, noting that client relationship managers used to provide a more comprehensive service. The ATO will provide a response at the November 2023 meeting.
Legislation and ATO updates
Members were provided with an opportunity to ask questions on updates which included:
- legislation and consultation
- news and program updates
- GST discussions at other ATO stewardship groups
- GST public advice and guidance
- GST litigation.
Other business and meeting close
Several departing members were provided with letters of appreciation as this was their last meeting with the GST Stewardship Group.
Attendees
Organisation |
Attendee |
|---|---|
ATO |
Hector Thompson (Co-chair), International, Support and Programs |
ATO |
Alex Affleck, Office of the Chief Tax Counsel |
ATO |
Andrea Wood, International, Support and Programs |
ATO |
Kath Anderson, Individuals and Intermediaries |
ATO |
Rowan Fox, International, Support and Programs |
ATO |
Will Day, Small Business |
Australian Banking Association |
Chris Plakias |
Chartered Accountants Australia and New Zealand |
Kevin O’Rourke |
Coles Finance |
George Nikolaou |
Corporate Tax Association |
Paul Suppree |
CPA Australia |
Ken Fehily |
Digital Service Providers Australia New Zealand |
Matthew Prouse |
Independent member |
Jennee Chan |
Property Council of Australia |
Andrew Howe (Co-chair) |
Small business representative |
Amanda Gascoigne |
The Tax Institute |
Bastian Gasser |
University of New South Wales |
Prof. Michael Walpole |
Guest attendees
Organisation |
Attendee |
|---|---|
ATO |
Adrian Preston-Loh, Public Groups |
ATO |
Andrew Watson, Individuals and Intermediaries |
ATO |
Ashleigh Larner, Private Wealth |
ATO |
Brian Lu, Public Groups |
ATO |
Jenny Lin, Private Wealth |
ATO |
Matthew Bambrick, Policy, Analysis and Legislation |
ATO |
Melissa Spurge, Public Groups |
ACT Treasury |
Nicole Wong |
Department of Treasury and Finance, South Australia |
Eka Baker |
Apologies
Organisation |
Member |
|---|---|
Law Council of Australia |
Andrew Sommer |
Treasury |
Geoff Francis |