Tax watchdog Ali Noroozi has called for the independence of his office to be bolstered and for the oversight of the Australian Tax Office (ATO) to be improved, amid concerns power is too concentrated at the highest level of the organisation.
In a valedictory speech delivered in Melbourne on Thursday night, the departing inspector-general of taxation (IGT) made a series of recommendations for improving tax administration.
He said a new management board should be established to oversee the ATO, which would “address concerns regarding too much power being concentrated in one individual, i.e. the Commissioner [Chris Jordan]”.
The calls come amid heightened scrutiny on the ATO after allegations of “bullying” and complaints from small businesses saying it’s difficult to appeal ATO decisions, following a joint Fairfax Media-ABC investigation.
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Noroozi also said the IGT should be renamed the taxation ombudsman and moved out of the Treasury portfolio to address an “inherent conflict” with the ATO, which is also housed within Treasury.
“While the IGT is well-known in the tax profession, awareness of its services needs to be better promoted among small businesses and individuals including the most vulnerable,” he said.
“We want to be treated with respect”
Moving the IGT out of Treasury is a move supported by small business and family enterprise ombudsman (ASBFEO) Kate Carnell.
“Moving the ITG out of the Treasury portfolio and reporting directly to parliament will provide increased independence,” the ASBFEO office said in a statement provided to SmartCompany.
“We also support the office being renamed the taxation ombudsman as our investigation in June 2018 found small business owners do not know the role of the inspector-general of taxation.
“While he [Noroozi] didn’t support our call for an independent body to assist small businesses in trouble, a step in the right direction would be establishing a separate and independent appeals group within the ATO, headed by a second commissioner,” the ASBFEO office said.
Nozoori did, however, express support for the creation of a second ATO commissioner to deal with appeals.
“Of the few outstanding recommendations, the creation of a separate and dedicated appeals group within the ATO led by a new second commissioner is critical,” he said.
Earlier this year the Australian Labor Party promised to name a second ATO commissioner to deal with specifically with SME and taxpayer disputes if elected.
Lisa Greig, principal of accounting advisory business Perigee advisers, supports Noroozi’s calls to bolster the independence of the IGT.
“[We want] to be trying to separate powers and have more oversight,” she tells SmartCompany.
“We want to pay the right amount of tax, but we want to be treated with respect.”
Greig believes a tax ombudsman could play a more forward facing role standing up for small business in the community.
“The way the ATO goes about their business … it could be seen to be biased,” she says.
“People are naturally scared.”
Ensuring “fairness and transparency” in taxation
Norozi urged those in the tax profession to support his, yet to be named, successor, saying that everyone had to work towards “fairness and transparency”.
“We must all work to ensure that fairness and transparency prevail in all things and to raise concerns where they do not,” he said.
“We are living in a time when untruths are easily and widely disseminated and where silence is taken to be acquiescence.
“Sitting on the sidelines is not helpful. Anything that is worthy of maintaining requires constant vigilance from everyone within the tax system,” he continued.
Noroozi will depart from his role as IGT in November, amid a review into the ATO’s garnishee notices sparked by media investigations earlier this year.
Amid discussions about tensions between the IGT office and the ATO in recent months, following increased scrutiny on the ATO, Noroozi said a “degree of tension” was an “entirely appropriate” aspect of the relationship between the bodies.
“Many have asked me for my views on the ATO’s performance in recent years. I believe that there have been benefits from the shake-up that the ATO has received and, could only have received, from a leader brought in from the outside,” Noroozi said.
“However, now that the dust has settled, the organisation needs to be steered steadily towards new frontiers.”
What are your views on Noroozi’s recommendations? Let us know at email@example.com.