Auditor-General critical of ATO on revenue commitments
At the same time as the Government seeks to achieve key Budget savings, including around superannuation, a new Auditor-General's report has suggested that the Australian Taxation Office (ATO) has been falling short on its revenue commitments.
The Australian National Audit Office (ANAO) has used a report on Meeting Revenue Commitments from Compliance Measures to suggest the ATO may have missed the mark over the five years between 2010 and 2015.
The ANAO report, elements of which the ATO says it disagreed, stated that it was "unclear if the ATO achieved the revenue commitments made to government for all Budget-funded compliance measures over the period 2010—11 to 2014—15".
It said the main shortcoming was "the absence of an accurate measure of business-as-usual baseline revenue raised from comparable pre-existing compliance activities" but added that the ATO also "did not accurately monitor the additional expenses incurred in implementing compliance measures".
The ANAO report, tabled in the Parliament this week, said the lack of clear business-as-usual baseline levels to enable accurate attribution of revenue and expenses to compliance measures, along with inaccurate attribution "undermines the assurance to government that the agreed amount of additional revenue is actually being raised and that the additional resources provided are used as agreed".
"The lack of an accurate baseline resulted in the significant overstatement of revenue attributed to one relatively large measure. It is therefore important that the ATO develops better ways of measuring additional revenue and expenses from its compliance measures, and improves checking of the accuracy of estimated revenue outcomes," the report said.
The ANAO report also starkly revealed the reasons why Government so strongly looked to pursue compliance measures, in circumstances where they could generate nearly $12 for every dollar invested.
The report said the projected rates of return on the investments made in the compliance measures since 2010—11 had varied considerably — ranging from $3.29 to $11.76 for every dollar invested, based on liabilities expected to be raised.
"For most measures examined, the ATO's revenue outcome figures indicated that higher rates of return had been achieved than projected," it said.
"However, rates of return of measures would be more meaningful if based on additional cash collected, a consistent approach to treating abnormal compliance activities and the amount of Budget funding of departmental and capital expenses."
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
