Rob Heferen: Address to the Corporate Tax Association National Heads of Tax forum
Outlining his priorities, Mr Heferen quoted the Roman philosopher Seneca, saying “there is no favourable wind for the sailor who doesn’t know where to go”.
Commissioner Heferen’s address to ATO employees at the corporate plan 2024–25 launch
Commissioner of Taxation Rob Heferen's address to ATO employees at the corporate plan 2024–25 launch, 13 August 2024.
This philosophy-quoting taxman is going old school
Taxation Commissioner Rob Heferen wants the ATO to return to old-school tax collection, promising strong but probably unpopular pursuit of more than $50 billion in outstanding debt.
Releasing a new corporate plan for the Australian Taxation Office, Mr Heferen signalled a move away from predecessor Chris Jordan’s so-called Tax 2.0 agenda, which focused on digital innovation and data matching.
Instead, he is planning to strengthen the collection of business debt, and chase unpaid superannuation obligations, pay as you go tax, withholding tax and GST revenue.
Growing collectable debt is a major problem for the ATO: last financial year businesses and individuals owed more than $50.2 billion, an increase of 89 per cent since 2019.
Unpaid superannuation guarantee debts increased from less than $1 billion before the pandemic to more than $2 billion today. The majority is owed by smaller employers.
The ATO gave taxpayers increased flexibility during the COVID-19 pandemic, but was strongly criticised for going after small debts owed by individuals in late 2023.
Mr Heferen was forced to defend the ATO’s obligations under law and reject comparisons to the illegal robo-debt scheme after letters went out to taxpayers and accountants chasing paused historical debts.
Nearly six months into the role, he told staff in an address on Tuesday to describe the ATO role as “our nation’s principal tax collector”.
“This means that, above all, we will aim to collect the right amount of tax, in accordance with the law, in the most efficient way for government and the taxpayer,” he said.
“We have a strong legacy to uphold, but we can’t be a single-minded tax collector. We will continue to respond to our environment and act with integrity and compassion.
“We will serve the government of the day with a shared purpose and commitment to deliver on our priorities for the Australian community.”
The focus on debt repayment will add pressure to struggling businesses. Australian Securities and Investments Commission data showed more than 11,000 companies entered external administration for the first time in 2023-24.
Overall, the number of external administrations grew by 39 per cent last financial year compared to 2022–23. Three industries – construction, accommodation and food services – represented more than half of all external administrations.
Exploiting loopholes
ASIC said restructuring appointments grew by more than 200 per cent in the period, representing 13 per cent of all external administrations in Australia.
Outlining his priorities, Mr Heferen quoted the Roman philosopher Seneca, saying “there is no favourable wind for the sailor who doesn’t know where to go”.
Multinational businesses operating in Australia face renewed scrutiny as well, as the ATO pursues compliance failures and businesses exploiting loopholes to pay less tax.
The new plan promises better public reporting of large businesses’ tax information and new priority-tax-risk areas to build community confidence.
Under Tax 2.0, Mr Jordan prioritised transformation of the tax system, including real-time reporting of tax information through digital systems.
Reforms like single-touch payroll systems, data matching and pre-filled annual returns have sped up routine accounting.
Mr Jordan had promised Tax 3.0 as well, in which reporting, payment and real-time compliance checks would coincide with a taxable event.
Since July last year, the ATO has handed over debt information on more than 10,500 businesses with overdue and undisputed tax debts exceeding $100,000.
Nearly 1.3 million tax audits and actions to stop dodgy deduction claims added $7.7 billion to revenue collections last financial year.
