Accounting groups back calls for taxpayer bill of rights to better protect SMEs


A parliamentary inquiry has recommended the federal government introduce a taxpayer bill of rights to give small businesses and individuals better legal protections when they engage with the tax office.

The Standing Committee on Tax and Revenue released its report on Tuesday, which included 19 recommendations related to improving the Australian Taxation Office’s (ATO) administration of the tax system.

While the recommendations are far reaching, several directly affect how small businesses engage with the ATO.

The committee recommends the federal government adopt a taxpayer bill of rights that would enshrine the rights of taxpayers, including small businesses, in legislation.

The bill, which is influenced by a US-style taxpayer bill of rights, would clearly state the rights and obligations of taxpayers and the taxation office.

Tony Greco, general manager of technical policy at the Institute of Public Accountants, says if the bill was adopted, it would mark a dramatic shift from the current framework.

“What we have now is a non-binding charter. It’s guidance on what the responsibilities of the commissioner are and it’s not legislated in any shape or form,” Greco tells SmartCompany.

Greco says the release of the report is timely given the Inspector-General of Taxation and Taxation Ombudsman (IGTO) recently published an investigation into the effectiveness of ATO communications of taxpayers’ rights to complain, review and appeal decisions.

“That [IGTO] report recommended the ATO to better communicate the right of a taxpayer to seek to raise a complaint and to have the rationale behind the dispute explained to them,” Greco says.

The committee also recommends improving tax disputes by giving a relevant dispute body or court the ability to make a final determination before a small business is required to pay any outstanding tax debts related to that dispute.

Elinor Kasapidis, senior manager tax policy at CPA Australia, says the report highlights the need to reform the tax administration system to “manage the power imbalance between the ATO and taxpayers”.

“The touchpoints of disputes, debt and proof are potential obstacles for all taxpayers, but especially small businesses, in navigating a complex system where access to advice and justice is costly,” Kasapidis tells SmartCompany.

Reversing the onus of proof

Another significant recommendation included in the report is reversing the onus of proof in fraud or tax evasion disputes.

Reversing the onus of proof in these cases would make the ATO responsible for proving an allegation is true, rather than making the taxpayer responsible for proving it was false.

Kasapidis says while this reform is “appropriate”, it would not affect a wide range of businesses if it was adopted.

“This change would only apply in limited circumstances involving fraud and evasion. Based on data from previous years, we’re probably only talking about 100 cases a year,” she says.

“The ATO is a vast and well-funded bureaucracy. It’s appropriate for the ATO to shoulder the burden of proof in cases where it’s alleging an intentional breach of the tax rules.”

Before publishing its final report, the committee received a range of submissions including from the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Self-Employed Australia and the ATO.

In her submission, Kate Carnell, the then-Australian Small Business and Family Enterprise Ombudsman, said she welcomed the committee’s review into the ATO.

Carnell said a recurring complaint from small businesses is that the ATO adopts a “punitive approach” to compliance, resulting in negative outcomes for the taxpayer.

Carnell called for “a nuanced and ‘small business aware’ approach” to deliver better outcomes and compliance.

The ATO’s submission to the committee outlined how the tax office implements its vision to be “a leading tax and superannuation administration”.

The submission highlighted the areas the ATO has been working on, including improving the small business experience, streamlining processes for tax practitioners and Single Touch Payroll.


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