The Australian Taxation Office has launched a crackdown on distilleries rorting a $400,000 tax scheme, with cheap vodka flooding retailers at below-tax prices.
The Australian Taxation Office’s (ATO) official oversight and complaints watchdog has criticised the revenue collection agency’s core digital portal for tax agents, saying it creates an unnecessary “administrative burden” that could increase compliance costs for taxpayers.
In a withering assessment that the ATO has largely copped in the chin, the tax ombud has let rip on the state of ostensibly digital transactions offered to registered tax agents who “represent around 62% of individual taxpayers and 96% of non-individual taxpayers”.
“Online Services for Agents (OSfA) is a secure digital platform provided by the ATO for registered agents and their authorised staff. The proportion of agents who said OSfA met all or most of their needs fell from 76% in 2022 to 63% in 2026,” the Tax Ombudsman office said.
“There are limitations of what agents can complete in OSfA, which creates inefficiencies and frustration, with agents needing to call the ATO to complete a transaction.”
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“In some cases, agents must request information from the ATO that already exists digitally, requiring ATO staff to manually prepare reports that could potentially be provided through self-service.”
The ombud also criticised the ATO’s languid pace in pushing through digital fixes for tax agents, pointing to a backlog of orphaned improvement tickets that has accumulated over four years and is now approaching three digits.
“There are almost 100 OSfA-related changes awaiting action in the ATO backlog of system improvements. Some improvements have sat on the list since before 2022 without progressing. Stand-alone improvements to OSfA often struggle to progress in the ATO’s change program prioritisation unless they become part of a larger ATO project,” the tax ombud observed.
Communication fudges also came in for a serve.
“Practice Mail is a web portal designed as a channel for agents to send requests to the ATO, not to support ongoing two-way communication with agents. It no longer meets the needs of agents who require more immediate two-way communications and broader functionality.”
The review observed that where the ATO’s digital services for agents are limited, “agents often need to rely on the registered agent phone line”.
“This is frustrating for agents, while also placing additional pressure on the ATO’s phone services, increasing wait times and delaying issue resolution.”
“We also identified a more systemic issue in the relationship between the ATO and agents, with agents feeling undervalued and their role not respected by the ATO.
“The perceived poor service received by phone and the limitations of the online services were identified as symptoms of that wider relationship issue,” the tax ombud went on, adding that the “ATO has committed to examining opportunities to improve its digital services by identifying content and functionality gaps.”
Digging deeper into the frustrations of tax agents, the review explained that manual, PDF, or paper-based processes have endured.
“Some lodgement processes in OSfA still rely on paper-based or manual workflows rather than fully integrated digital services. Agents can complete requests for refunds of franking credits online for most taxpayers, but requests for non-profit organisations still require agents to complete a PDF form and submit it through Practice Mail for manual processing by the ATO,” the watchdog said.
The issue seems to be one of competing priorities “based on user demand, available funding, system capability, and broader digital priorities,” with the refund “of franking credit requests for non-profit organisations” stuck on paper-based processes “because the ATO does not consider there is sufficient demand to warrant digitisation”.
The ATO cannot digitise everything at once, so it must decide which services to improve. However, demand is not the only factor that matters. The nature and importance of what the form is used for should also be considered,” the tax ombud said.
“Refund of franking credit requests are how eligible non-profit organisations claim a refund they are entitled to receive from the ATO. Some functions are important enough that they should generally be available online, even when they are used by relatively few people. The ability to claim a refund from the ATO is one such function.”
Andrew Leigh, take note.
The ATO copped it sweet.
“The ATO recognises the important role registered agents play in the administration of Australia’s tax and superannuation systems and remains committed to supporting agents through contemporary, secure, and efficient digital services.
“We acknowledge the report’s findings regarding OSfA and the challenges agents can experience when digital services do not fully meet their operational needs,” the ATO said in its response.
“We agree with the report’s recommendations and acknowledge the opportunities identified to enhance self-service capabilities, improve transparency around prioritisation decisions, and strengthen digital engagement channels for agents.”
The Tax Office said it recognised “the importance of ensuring agent needs are appropriately reflected in decisions about future digital service improvements and is committed to strengthening how agent feedback is considered, assessed, and communicated”.
That commitment will no doubt be tested before parliamentary committees.
“The ATO operates in a complex environment and must balance a range of competing priorities, including legislative obligations, security requirements, service delivery commitments, and longer-term transformation initiatives,” Tax responded.
“Within this context, we remain committed to working collaboratively with agents and their representative bodies to identify and deliver improvements that reduce administrative burden, enhance the digital experience, and provide lasting benefits for agents, taxpayers, and the broader tax system.”
Blast from the past
