Tax Commissioner on SmallBusiness Compliance

The Tax Commissioner gave a speech to the Council of Small Business Organisations of Australia (COSBOA) in Melbourne yesterday [Mon 26.6.2006]. He talked about the Australian Tax Office’s approach to small business compliance and what the Tax Office is doing to make it easier for business to comply with its taxation obligations.
Some points from that speech included:

  • in 2004-05, the Tax Office collected about $4 billion of the total net tax receipts of $214 billion — the rest came in as voluntary compliance, supported by systems such as PAYG;
  • the Tax Office’s approach to administering the tax system is threefold: (i) it wants to maximise the number of taxpayers who choose to voluntarily comply by providing service excellence and by making it as easy as possible for them to understand and meet their obligations; (ii) the Tax Office seeks to treat taxpayers fairly in accordance with the law; and (iii) at the same time, it has strategies to deter, detect and address non-compliance;
  • Tax Office research has shown the majority of people starting a new business do not get information about tax obligations early enough. In response, the Tax Office has just released on its website an updated checklist for people new to business;
  • while 95% of micro-businesses use tax agents to prepare their income tax returns, over 50% prepare their own activity statements;
  • Tax Office staff answering phone calls now have a complete history of interactions with taxpayers onscreen in front of them;
  • in June 2004, the Tax Office gave small businesses with debts under $25,000 an opportunity to clear their debt under favourable terms. As at 5 May 2006, the Tax Office has negotiated some 2,000 promises to pay by instalments or in full to the value of approximately $50 million.
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