Mar 2022 2 Minutes
Tax Compliance & Integrity Measures
Article part of 2022-23 Federal Budget update
Extension of the ATO Tax Avoidance Taskforce
The Budget announced several tax compliance and integrity measures. Perhaps indicative of the potential cost/benefit modelling Treasury have conducted, the Government will provide $325 million in the 2024 and another $327.6 million in 2025 to the ATO to extend the operations of the ATO’s Tax Avoidance Taskforce until 30 June 2025. This extension is estimated to increase tax receipts by $2.1 billion, and increase payments by $652.6 million over the forward estimates period.
Originally established in 2016, the Taskforce undertakes compliance activities targeting multinationals, large public and private groups, trusts and high wealth individuals. It also scrutinises specialist tax advisors and intermediaries that promote tax avoidance schemes and strategies. The primary aims of the Taskforce are to protect revenue and the integrity of the tax system by detecting tax avoidance and to improve the ATO’s data analytics, risk and intelligence capabilities in order for the ATO to decide on and manage tax avoidance risk.
Given the increased compliance activities, risk and assurance reviews and expected tax receipts increase, we can expect the Taskforce to have an increased coverage and impact on us all.
Modernisation of PAYG instalment systems
The Government confirmed the Treasurer’s earlier announcement that companies will be allowed to choose to have their pay as you go (PAYG) instalments calculated based on current financial performance, extracted from their business accounting software, (subject to some tax adjustments). It is expected that systems will be in place by 31 December 2023 (subject to advice from software providers about their capacity to deliver), with the measure anticipated to commence on 1 January 2024.
Digitalising trust income reporting
Confirming the Treasurer’s earlier announcement, the Government will digitalise trust and beneficiary income reporting and processing, by allowing all trust tax returns to be lodged electronically. The intention of this measure is to allow increased pre-filling and automating of the ATO assurance processes. The measure is expected to commence from 1 July 2024, subject to advice from software providers about their capacity to deliver.
Whilst details on these measure are light, if you do have any queries please call our office and speak to your accountant if you would like to discuss how these measures may impact you and your business.