“We must collect taxes without causing unnecessary burden to citizens. Just as a flower is not hurt when the bee draws nectar from it, so also should the king not disturb the taxpayer when he collects taxes.”.
~ Kautilya (c. 350-275 BCE)
Tax watchdog finds ATO staff ill-equipped to handle taxpayer disputes
Inspector-General and tax ombudsman Karen Payne blows whistle on ATO unfairness
ATO set to improve advice on tax complaints
Fewer than 1 per cent of Tax Office staff attended stand-alone training on the rights of taxpayers to complain or appeal official decisions on their personal financial matters last financial year, a new report by the independent watchdog has found.
Inspector-General of Taxation and Tax Ombudsman Karen Payne reviewed the effectiveness of the ATO’s processes designed to help taxpayers understand their rights, finding only 323 staff attended courses on review rights and the taxpayers’ charter since 2019.
The ATO will begin implementing changes on complaints and appeals. Louie Douvis
While more than 21,000 people work at the ATO, officials said all newly hired staff are required to complete an induction course which includes training about the charter, in addition to regular on-the-job education.
The charter outlines the rights and obligations of Australians dealing with the ATO, explaining what they should expect from administration of taxation and superannuation.
Tax Commissioner Chris Jordan’s instructions to ATO staff include providing information on rights to review and complaints.
With a review of the charter already under way, Ms Payne recommended an express right to complain and appeal decisions be added.
That would help people understand they can lodge formal complaints, or seek a review by the ombudsman or the Small Business Tribunal.
The report recommends requiring ATO officers to be encouraged or instructed “to communicate clear and complete” information to taxpayers on their rights, part of efforts to boost voluntary compliance with tax laws, minimise unnecessary disputes and cut the cost of compliance and legal action.
Better communication would also help safeguard against inconsistent outcomes for different taxpayers.
Ms Payne said recent surveys by Chartered Accountants Australia and New Zealand and publisher Wolters Kluwer both showed more than 90 per cent support for accountants and clients to be informed of their rights to lodge formal complaints.
“Taxpayers do have rights. They’re not always set out in legislation. Sometimes they’re administrative rights,” she told The Australian Financial Review.
“But I would say even an administrative right, like something in the taxpayers charter, creates an expectation that the administrator will observe and respect those rights.”
She said small tweaks could improve the system’s fairness.
“The ATO is not always as effective at communicating to taxpayers that they have informal rights, which I think are equally important and sometimes are a better outcome for the taxpayer who doesn’t have deep pockets.”
In its response the ATO said it would review procedures around complaints where clients may be unsatisfied with outcomes, to ensure they are made aware of the ombudsman’s services, along with other complaint and appeal channels.
Acting ATO chief law officer Kirsten Fish said the organisation would improve communication with taxpayers, but a recommendation that the ATO encourage dissatisfied taxpayers to lodge a complaint needed further consideration.
“Given complaints are limited in their ability to resolve substantive tax issues, it would not be appropriate to encourage a complaint at the expense of the exercise of statutory review rights, particularly given the time frames governing those rights,” she said.
“There may be cases where it is appropriate for complaint channels to run parallel to a taxpayer exercising their statutory review rights.”
In 2019-20, the ATO received 24,778 complaints – including many related to the COVID-19 crisis. Income tax, super, ATO services and activity statements topped the list of categories.
About 83 per cent were resolved within 15 business days or by an agreed date, close to a target of 85 per cent.