Tax gap proves the bar needs to be raised, says IPA
Tax non-compliance amongst individuals is substantially higher than amongst large corporate groups, with figures released by the Australian Taxation Office (ATO) showing the “individual not in business” tax gap sits at $8.7 billion for the 2014-15 financial year.
The figure, which equates to a 6.4 per cent gap as against the 5.8 per cent gap for large corporate groups, is substantially bigger than the corporate tax gap in absolute terms.
Institute of Public Accounts (IPA) chief executive officer, Andrew Conway, said while the report was alarming, 72 per cent of the 858 cases in the ATO’s random sample contained errors.
Conway said the ATO even acknowledged the report was not adequate to define a trend, but served as a reminder that individuals and tax agents must commit to raising the bar.
He said it was “human nature” for individuals to want to maximise refunds and in doing so, may mislead their agent in the course of preparing their return.
“The IPA continues to carry out quality assurance of its members and actively seeks to weed out unprofessional behabiour and reduce error rates,” he said.
Conway stressed that a vast number of tax agents were highly professional, driving home that all tax agents should not be tarred “with the one ATO brush”.
Recommended for you
With the highest number of candidates in a year sitting the latest financial advice exam, a surge of new entrants are expected in the coming weeks, according to Wealth Data.
AMP has launched a range of five diversified index managed portfolios on its North investment platform, targeting a younger client demographic.
An NSW adviser, who advised over 120 clients after falsifying her financial advice exam results, has been permanently banned by ASIC.
ASIC has released the results from the latest financial adviser exam, the first to be run since changes to its structure earlier this year.