At the same time as promising major tax cuts if it is re-elected, the Federal Government has somewhat more quietly revealed how it would fund some of those cuts — through an increase in revenue collections by the Australian Taxation Office (ATO).
The Government has said it will provide the ATO with an additional $446 million over the next four years to enhance its capabilities, help bed down self-assessment and drive increased revenue collections.
According to the Government, the Australian Taxation Commissioner has advised that the increased funding will increase revenue collections by around $3.7 billion over the four year period.
The Government, which has announced the increased funding as part of an election promise, said it would enable the ATO to provide taxpayers with better and more targeted help and education products to assist with more accurate self assessment.
It said this, in turn, would allow a greater focus on prevention of non-compliance by early detection and advice on taxpayer obligations.
The announcement said that the funding would also help improve intelligence and early risk detection, including through data mining and strategic risk research and allow for increased and more targeted enforcement activity.
While some of the key groups within the financial services industry have not yet commented on the Government’s promised tax cuts, the National Institute of Accountants has suggested that any cuts should be accompanied by a “sustained reduction in the amount of red tape and complexity that is endemic to the current system”.