ATO to take ‘prevention-before-correction’ approach
The Australian Taxation Office is aiming to boost compliance among high net worth individuals and private groups, by ramping up face-to-face engagement through its "prevention-before-correction" approach.
Speaking at the Tax Institute South Australia Convention 2015, ATO Second Commissioner, Andrew Mills, said the ATO was taking pre-emptive measures to improve tax compliance.
"We are moving toward a prevention-before-correction approach and ramping up face-to-face engagement to provide a better service and ensure it is easy to comply," he said.
"Late last month, we started visiting the largest groups with more than $1 billion in turnover or $500 million in net assets. There are a total of 175 groups in this category that control almost 6000 entities.
"We are shifting our approach and will be visiting our largest groups to look at their tax affairs in real time, raise any concerns and resolve issues before companies lodge their tax returns.
"This is about building strong and transparent working relationships with privately owned and wealthy groups and their tax advisers."
While the ATO has adjusted its focus to a prevention is better than cure philosophy for managing the tax compliance of the country's richest, Mills said, "most wealthy Australians and their private groups do the right thing".
"However, some choose to avoid tax," he said. "Approximately 30 per cent of the private groups linked to wealthy individuals are considered higher-risk.
"We're lucky in Australia to have high levels of voluntary compliance because of community confidence, and this is something we take very seriously.
"It was good to be able to put on public record our compliance approach to ensuring multinationals and Australian corporates pay the right amount of tax."
AUTHOR
Nicholas O'Donoghue
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