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National Tax Liaison Group key messages 19 October 2023

Key topics discussed at the National Tax Liaison Group meeting 19 October 2023.

Published 29 November 2023

Meeting theme

The theme of the meeting was service delivery.

Key highlights

  • Treasury provided an update on the following matters:
  • The ATO outlined the current challenges faced by Service Delivery, and its current priorities, which include a focus on developing a 2030 vision and developing and retaining its workforce.
  • Members provided their thoughts on where the biggest difficulties and future opportunities might lie to improve ATO Service Delivery outcomes.
  • The ATO provided an overview of the various work types involved in the service delivery environment, which vary widely in complexity and resolution time. Members were encouraged to provide their ideas on how the ATO can reduce the amount of paper correspondence it receives and increase taxpayer uptake of digital services.
  • Members discussed the return to business-as-usual approach the ATO is taking towards outstanding taxpayer debt. Appropriate messaging will be necessary to ensure taxpayers and professional organisations are aware of this change.
  • Complaints at the ATO have risen in number due to various factors. However, the ATO continues to resolve most complaints made within its service standards.
  • The ATO discussed the features and benefits of a number of its engagement services, including

Opening comments

Kirsten Fish, Second Commissioner, Law Design and Practice Group, ATO; Peter Godber, The Tax Institute

National Tax Liaison Group (NTLG) co-chair Kirsten Fish and external co-chair Peter Godber welcomed members.

Assistant Director Simon Staples of the Corporate Tax Association is attending as proxy for Michelle de Niese.

Both chairs acknowledged that the professional associations play a key role for the ATO to successfully deliver taxpayer services

Treasury

Diane Brown, Deputy Secretary, Revenue Group; Laura Berger-Thomson, First Assistant Secretary, Personal and Indirect Tax and Charities Division, Revenue Group, Treasury

  • Work continues on the Mid-Year Economic and Fiscal Outlook.
  • The Final Budget Outcome 2022-23 was released, with the underlying cash balance confirmed as a surplus of $22.1 billion. A big driver of the budget position was the strong labour market and elevated commodity prices.
  • Working Future: The Australian Government’s White Paper on Jobs and OpportunitiesExternal Link was released in September 2023. The paper provides a roadmap to position the Australian labour market for the future, and outlines the practical actions being taken and the further reform directions required to achieve this potential.
  • The Intergenerational Report was released on 24 August and the government has identified various priorities, including
    • easing the cost of living
    • working to improve the budget via spending constraint and modest but meaningful tax changes
    • maximising opportunities from the net zero transformation – unlocking investment in cleaner, cheaper energy and building clean industries
    • building a larger, better-trained workforce
    • increasing and deepening Australia’s industrial base
    • designing more efficient markets, including through a Competition ReviewExternal Link
    • reforming economic institutions
    • finding ways to address entrenched and intergenerational economic disadvantage.
  • The High Court ruled on a case involving Victoria’s road user tax on low-emission vehicles, finding the Victorian government could not charge electric, hydrogen and plug-in hybrid vehicle owners (known as Zero and Low-Emission Vehicles) a fee for each kilometre they travel. It was acknowledged that the issues at play are complex, and it will take some time to work through the implications of the decision.
  • Response to PwC – information sharingExternal Link consultation process has now been completed.

Treasury acknowledged consultation submissions are an important part of the consultation process, noting that the inclusion of examples and case studies in submissions assists with providing context and improving communication. Members noted it would be difficult to incorporate this level of detail in a submission if the consultation period is short, with longer consultation periods suggested to improve outcomes.

Members asked whether there was opportunity to consult with Treasury further on the proposed reform of promoter penalty laws. The ATO noted it would be working with Treasury to understand the potential implications of the proposed new legislation. Members were encouraged to share their feedback with the ATO as part of this process.

Current and future priorities in delivering ATO services

David Allen, Chief Service Delivery Officer, Service Delivery, ATO

The ATO provided an overview of current service delivery challenges, including:

  • workforce attrition rates
  • the current high volume of processing items
  • increasingly complex and different work types
  • funding to invest in digitalisation and automation.

The ATO also discussed current service delivery priorities including:

  • a focus on integrity
  • targeted investment in ATO service delivery staff tools and development of service delivery career pathways to reduce workforce attrition
  • delivery of efficient digital and automated services to ATO clients and reduce systemic risk
  • development of a 2030 vision for Service Delivery.

Members commented that overall they felt the ATO was headed in the right direction to deliver quality ATO services.

Members noted that tax agents often faced similar workforce/staffing pressures, and that certain online services for agents were not yet available, which drove agents to contact the ATO for resolution.

Member reflections on the future of service delivery

Jerome Tse, The Tax Institute

Members noted the following:

  • AI technology will be key to an improved client experience; however, this would need to be balanced to ensure taxpayers who are not digitally aware, are brought along in the transition.
  • Increasing transparency about taxpayers’ progression updates to tax agents via the portal, or via notes and emails would assist to reduce agent phone calls.
  • A single point of contact, such as key client manager, would be helpful for mid-market client portfolios where this can be achieved. For instance, Big 4 banks have managers who look after client sectors, such as Top 500 clients. Members noted positive feedback from taxpayers who have client relationship managers.
  • Increased automation in the tax system where it is possible.
  • It is important to look at the bigger picture to remove tension, not just the ATO view: professional associations are also experiencing the same workforce issues, including high attrition rates.

Contact centre call volumes and processing

Grant Brodie, Deputy Commissioner; Nicole Dykstra, Assistant Commissioner, Client Account Services, ATO

The ATO outlined the large number of processing work types that are managed within Service Delivery. The complexity varies, so staff must be multi-skilled and placed appropriately to service relevant work queues.

Discussions were held regarding reducing tax practitioner call volumes, including:

  • looking at the ease of requesting/arranging client payment plans
  • improving accessibility for clients to access self-service activity statement lodgment
  • how to eliminate/reduce progress inquiries
  • client penalties/interest charges
  • increased complaint call volumes

The ATO is looking at ways to streamline processing procedures where this can be achieved, including better understanding of:

  • correspondence items (such as letters) received by the ATO
  • aged work items, to improve workflows.

Members noted the need to assist the ATO and requested further relevant demographic data to assist them to understand the landscape, with a view to generating feedback on how to improve the outcomes the ATO is seeking.

It was acknowledged that the professional organisations have an important education role to play to improve outcomes, either in relation to:

  • educating members working in tax practices on the best way to work together with the ATO
  • taxpayers, to deliver relevant and timely messaging.

Members were encouraged to provide feedback on strategies the ATO may be able to implement to reduce the amount of paper correspondence received and increase taxpayer uptake of digital resources.

Action item

NTLG 2310/1 Contact centre call volumes and processing

Due date

In progress

Responsibility

Nicole Dykstra, Assistant Commissioner, Client Account Services

 

Grant Brodie, Deputy Commissioner, Client Account Services

Description

The ATO will collate relevant demographic data and provide this to professional organisations.

The ATO will provide members with 3-5 key messages to be provided to members to raise awareness of how they can work with the ATO to achieve improved service delivery outcomes

ATO debt collection approach

Vivek Chaudhary, Deputy Commissioner; Anita Challen, Assistant Commissioner, Lodge and Pay, ATO

The ATO noted it is transitioning back to its pre-COVID-19 approach to business, after taking a concessionary, accommodative approach to debt recovery during the COVID-19 period. It was acknowledged that COVID-19 has left a cumulative impact felt by many business sectors and individuals in the community.

The ATO will be focusing on:

  • administering the right level of taxpayer engagement to enable and empower businesses and individuals to get back on track, and remain on track
  • aged and high value debts
  • taking firmer and stronger actions should the need arise. This may include director penalty notices and garnishee actions.

The ATO’s main focus is to deliver the right communications and change taxpayer behaviour in a positive way to achieve outcomes. The ATO is communicating with the community to raise awareness of the change in its approach, and noted that individual taxpayers and businesses should be encouraged to:

  • be aware of their debt (if applicable), and manage this appropriately to avoid penalties
  • act in a timely fashion to fulfil their lodgment obligations
  • be proactive in managing their tax affairs.

Employers also need to be aware of and adhere to their obligations in a timely manner.

Members were encouraged to deliver appropriate messaging to their members and clients to ensure they understand the changed ATO approach.

Trends in client service satisfaction and complaints

Kath Philp, Assistant Commissioner, ATO Corporate, ATO

The ATO observed that challenges in processing backlogs have been a contributing factor in increased complaints. The main driver of increased complaints is timeliness, but other factors include:

  • the rising cost of living / financial hardship
  • post-COVID-19 ATO management of taxpayer debts
  • unclaimed/unpaid superannuation.

Additionally, for taxpayers whose identity has been compromised, this is also causing frustration.

Although complaints have risen, the ATO has been able to maintain its service standards and many complaints have been quickly resolved. It appears the current process remains an efficient and effective way to address taxpayer complaints.

It was acknowledged that the revised Taxpayers’ Charter has made the complaints process more visible and accessible to taxpayers. Members noted it was important to manage taxpayer expectations and ensure they understand expected processing timeframes. This may reduce complaints.

Members noted it was sometimes difficult to speak directly with the decision-maker of a matter when following up matters on a client’s behalf. Members further observed that anecdotally, many taxpayers were already highly emotional and stressed due to the current environment, and therefore it was to be expected that they would take out their frustrations by lodging complaints.

Members suggested the ATO should focus on aged complaints and communicate clearly to agents and taxpayers on the progress of a matter.

Members noted that some agents upon receipt of a complaint reply, did not feel that the response addressed the issue at hand and provided no additional contact details. The ATO advised it would investigate this matter.

ATO engagement and advice

Sarah Hassen, Assistant Commissioner, Public Groups; Emily Webster, Assistant Commissioner, Office of the Chief Tax Counsel; Kasey Macfarlane, Assistant Commissioner, Private Wealth; Scott Parkinson, Assistant Commissioner, Private Wealth, ATO

The ATO provided an overview of its engagement and advice services. One of the newest services is the New Investment Engagement Service (NIES). Introduced in July 2021, this service is available to businesses planning significant new investments ($250 million or more) in Australia.

Before undertaking significant commercial risks and transactions, investors can engage with the NIES to:

  • understand potential tax risks arising from their proposed investment structures
  • receive tailored information about existing ATO services and programs
  • get help navigating the Foreign Investment Review Board process.

Private rulings are binding on the Commissioner of Taxation and are a key pillar of our engagement services. They set out how the tax law applies in relation to a taxpayer’s specific scheme or circumstance. If the ATO notices a common theme occurring in submitted private rulings, it may issue a public ruling on the decision. Members were encouraged to work with the ATO to identify common themes that would benefit being issued as a public ruling.

Members further noted in relation to recently introduced law, it would be helpful to release public guidance on key issues immediately, and then prioritise the release of smaller, related issues as a separate guidance product (rather than an all-encompassing, comprehensive ruling that takes longer to issue).

A further service available to privately owned and wealthy groups is the Commercial Deals Engagement Program. A commercial deal is any significant business transaction that may affect the structure of a business.

The Commercial Deals Engagement Program provides certainty on events for a taxpayer prior to lodgment of their tax return, that is, after a transaction has been completed. If a taxpayer chooses to use this program, the ATO can:

  • help resolve tax technical issues relating to the deal
  • work towards agreement on the tax position the taxpayer intends to take
  • help the taxpayer meet their tax obligations and reduce the likelihood of a review.

Working together prior to lodgment can achieve mutual resolution of tax issues and help avoid tax disputes post-lodgment.

If agreement is reached and lodgment received as agreed, the ATO will not conduct a review or audit for the commercial deal transaction in question.

Action item

NTLG 2310/2 Delayed private rulings

Due date

In progress

Responsibility

Julie Abdalla, The Tax Institute.

Jodi Williams, ATO (NTLG secretariat)

Description

NTLG secretariat to canvas member interest in an out of session meeting to discuss rulings with long delays.

Members are to provide additional information with regards to delayed rulings (that is., How prevalent is this? Are delays occurring when matters are transferred to another area within the ATO?)

Action items update

NTLG 2308/5 – Confidential consultation

Responsibility – Julie Abdalla, The Tax Institute

This item will remain open.

NTLG 2308/4 – consultation group

Responsibility – Kirsten Fish, Second Commissioner, Law Design and Practice, ATO

This item will remain open.

NTLG 2308/3 – Effectiveness measures

Responsibility – Kate Wilson, Assistant Commissioner, Enterprise Strategy and Design, ATO

This item will be closed. The out of session workshop on consultation effectiveness measures was held with interested parties on 18 October. An update will be provided at the February NTLG.

NTLG 2308/2 – Potential consultation with the Law Profession

Responsibility – Jonathan Todd, Deputy Commissioner, ATO

This item will remain open. The ATO is considering possible options and system constraints to provide to members for further discussion.

NTLG  308/1 - Multinational Tax integrity engagement plan

Responsibility – Harjit Singh, Assistant Commissioner, Office of the Chief Tax Counsel, ATO

This item will remain open. A plan is being developed and will be made available to members for comment/feedback.

NTLG 2306/1 – Strategies to improve tax agent interactions with the ATO

Responsibility – Julie Abdalla, The Tax Institute

This item will remain open, members are encouraged to provide feedback.

NTLG 2304/1 – Consultation feedback

Responsibility – Julie Abdalla, The Tax Institute

Members confirmed correspondence was provided to Treasury about this matter on 30 September 2023. This item was agreed to be closed.

Other business

The theme of the December meeting will be dispute resolution.

Attendees

Attendees list

Organisation

Attendees

ATO

Kirsten Fish, (Co-chair), Law Design and Practice

ATO

Will Day, Small Business

ATO

Martin Pook, Office of the Chief Tax Counsel

ATO

Jodi Williams, (Secretariat) Enterprise Strategy and Design

Chartered Accountants Australia and New Zealand

David Watkins

Chartered Accountants Australia and New Zealand

Michael Croker

Corporate Tax Association

Simon Staples

CPA Australia

Alexis Kokkinos

CPA Australia

Elinor Kasapidis

Institute of Public Accountants

Tony Greco

Law Council of Australia

Justin Byrne

Law Council of Australia

Mia Clarebrough

The Tax Institute

Jerome Tse

The Tax Institute

Julie Abdalla

The Tax Institute

Peter Godber (Co-chair)

Treasury

Diane Brown

Treasury

Laura Berger-Thomson

Apologies

Apologies list

Organisation

Member

ATO

Jeremy Hirschhorn, Client Engagement Group

Corporate Tax Association

Michelle de Niese

 

 

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