We are constantly working to minimise the GST gap and maximise voluntary compliance by addressing and influencing taxpayer behaviour. A range of taxpayer actions can affect the GST gap, including:
- non-reporting of GST
- under-reporting of GST
- over-claiming of refunds
- non-payment of GST liabilities.
These behaviours range in severity from honest reporting errors to deliberate non-compliance.
Our compliance programs usually have a balance of prevention, early engagement and assurance activities. They are targeted to higher risk taxpayers and industries.
We continue to focus on managing GST compliance risks and behaviours that impact the integrity of the GST. This year we strengthened our ability to manage GST risks including fraud, by using contemporary technology to:
- improve our risk identification process with techniques that detect risks earlier, enabling us to apply differentiated and tailored treatment strategies
- deliver an automated solution, streamlining processes related to managing high-risk refunds
- support a better client experience by providing staff with a more holistic view of GST lodgment when engaging with clients.
To ensure large businesses pay the right amount of GST and to reduce the gap, we have a combination of one-to-one and one-to-many approaches. These include our justified trust assurance programs and advice and guidance strategies.
Where a business activity statement (BAS) lodged online contains an identifiable reporting error, we generate nudge messaging recommending clients check their BAS before they lodge their refund.
A key focus area in the 2023–24 ATO Corporate Plan is to improve small business tax performance with a digital-first approach. To encourage enhanced integration that supports high-quality, system generated tax guidance to minimise errors, increase confidence and promote right-time reporting and payment. This work is aligned to the OECD Tax Administration 3.0 vision and the ATO Digital Strategy.
Our key opportunity areas to reduce the tax gap include increasing confidence and certainty in the system and increasing digitalisation to reduce errors and mistakes. Additionally, we have commissioned several GST-related pilots to focus on opportunities that may drive improved small business tax performance.
We prevent compliance issues before they arise by supporting those who want to do the right thing and helping them reduce mistakes through reminders, nudges, improved information on ato.gov.au and public advice and guidance.
We take a firmer approach with those we detect deliberately evading their GST and other tax obligations.
We embed our GST work programs across all taxes, to deliver more effective and efficient risk management and enhance the taxpayer experience.
We will continue to work towards closing the gap by:
- building trust and confidence within the community by implementing strategies under the GST Compliance Program
- achieving GST compliance outcomes from other ATO government funded programs including the Shadow Economy, Serious Financial Crime and Phoenix Taskforces.