Speech to Australian Shareholders' Association Investor Conference
Second Commissioner Jeremy Hirschhorn's speech at the Australian Shareholders' Association Investor Conference
Commissioner's address at the ATAX International Conference
Commissioner of Taxation, Rob Heferen's address at the UNSW 16th ATAX International Conference on Tax Administration.
Macro trends in taxation of large corporations - Thomson Reuters SYNERGY Conference
The days of millions of Australians fretting over a late tax return and then nervously waiting to find out whether they will get pinged for overclaiming deductibles, or worse yet, underclaiming, could soon be over for good, with everyday citizens just asked to confirm what they earned.
That’s the take of the ATO’s most powerful data wonk, Jeremy Hirschhorn, second commissioner of the Client Engagement Group. Hirschhorn has used a pair of speeches to warn tax stakeholders, including government agencies, that they must be “hyper vigilant” about human responsibility for decisions and outcomes derived from automated processes or artificial intelligence.
“More and more information like interest and dividend income, standardised investment trust data, salary, health insurance data, and information about contractors are all going directly into tax systems,” Hirschhorn told the Thomson Reuters SYNERGY Conference in Sydney.
“This trend will continue, and we’ll see the classic concept of ‘self-assessment’ (at least for those with simpler affairs) being gradually replaced with ‘assisted assessment’ where taxpayers are provided with a comprehensive picture of their own data, which they then largely simply confirm.”
Put more simply, there’s no need to file a tax return if the ATO already knows what you’ve earned.
The idea of persistent, up-to-date tax compliance — informed and verified by electronic data interchange — has been a long-term goal for the ATO and other jurisdictions, dating back to the so-called digital transformation of tax and revenue systems and agencies within OECD economies. That concept, dubbed Tax 3.0, was previously a north star for former commissioner of taxation Chris Jordan.
With a new commissioner in Rob Heferen, and a renewed emphasis on compliance and collection to whittle down the tax gap (the difference between the amount of revenue collected and that assessed as owing), not to mention the budget deficit, Tax 3.0 has been less publicly prominent, at least in name.
Even so, Hirschhorn stressed, the use of what’s known as ‘third party data’ — which are feeds from the likes of corporate payrolls and other payments and remittance platforms, including banks — is increasing and underpinning accurate and effective tax collection and compliance.
“What has become increasingly critical in a modern tax system is reliance of the system on third-party data provided by large corporations (ideally the ones now showing high levels of compliance!), which fuels how taxpayers of all sizes interact with their tax obligations,” Hirschhorn said.
“Third-party data gives administrators the ability to feed information into the system that makes complying easier, and importantly, not complying harder.
“Under traditional analysis, there are four pillars of tax compliance: registration, lodgment, payment, and correct reporting. Increasingly at the ATO, we are ‘splitting out’ third-party reporting (i.e. reporting on the tax affairs of others) as a ‘fifth pillar’ in its own right, Hirschhorn continued.
He said this meant modern tax administrators would be “asking for new data sources from companies holding relevant information, and tax systems will increasingly be defined around the fifth pillar of third-party data, rather than vice versa.”
Hirschhorn also gave an insight into just how far off the data governance rails the robodebt scandal took the public service and former government — fitting because it was the ATO’s data that was misused against the will of the agency.
In a second speech on Thursday to the UNSW 16th ATAX International Conference, also in Sydney, Hirschhorn reflected on what lessons the bruising innings with the robodebt scandal, where he was a key witness in illuminating the rogue activities of the former Department of Human Services, had taught the ATO.
“In the context of information obtained under compulsory powers, taxpayers must provide us information even if that information would be self-incriminating,” Hirschhorn said of the ATO’s ability to compel the production of information.
“This particular exception to the general rule in a liberal democracy is justified on the basis that some financial information is uniquely in the possession of the taxpayer, and the job of a tax administrator could be easily frustrated without this exception.”
Then he let it rip.
“These factors emphasise the sensitivity and care with which we must treat taxpayer data. On-sharing of this data, even with other parts of the government, must be strictly in accordance with the law.
“But perhaps more importantly, and a lesson from robodebt is that the tax administrator must continue to act as a steward of that data even after it has been legally shared.”
This public servant ain’t getting mugged twice.
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Speech to UNSW 16th ATAX International Conference
Second Commissioner Jeremy Hirschhorn's speech at the UNSW 16th ATAX International Conference on Tax Administration.
Thomson Reuters SYNERGY Conference
Second Commissioner Jeremy Hirschhorn's panel discussion at the Thomson Reuters SYNERGY Conference.
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This is a joint media release between the Australian Federal Police and the Australian Taxation Office.
