Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

On behalf of the Standing Committee on Tax and Revenue, I present the committee's report entitled 2014 Annual report of the Australian Taxation Office: First report, together with minutes of proceedings. It is my pleasure to speak to the report, which details activities of the committee as well as the discharge of its duties in scrutinising the ATO. As the committee enters its second year overseeing the ATO, I am pleased to inform the House that the ATO's enthusiasm and drive to improve its services has continued. The ATO has made good progress toward achieving its goal of reinvention to becoming a leading contemporary tax administration. I note the ATO's clearly articulated strategic direction and its commitment to link its corporate goals and priorities to meaningful performance indicators. A clear strategic direction, together with robust performance measurement and reporting are key elements of an efficient and transparent tax administration.

My colleagues on the committee and I commend the ATO on the steps it has taken and continues to take to reinvent the client experience. Particularly encouraging is the ATO ' s incorporating modern technology into its systems to improve both the accuracy of tax information and the taxpayer experience.

Our taxation system relies on the Australian people ' s trust that the system is fair and equitable. Noncompliance, such as demonstrated by those operating in the cash economy, robs Australia of much needed revenue and disadvantages honest and hard-working Australians who are seeking to do the right thing. More must be done to tackle this noncompliance issue. The cash economy, despite being small when compared with those in other nations, remains an endemic issue that is present in a large number of industries.

The committee is concerned with the unfair advantage the cash economy grants noncompliant businesses. It also affects the community ' s perceptions and confidence in the tax system. The committee is further concerned that there is a community perception that the tax economy is growing. As such, the committee supports the ATO ' s pursuit of comprehensive tax gap estimations.

The tax gap is the difference between the amount of tax legally payable if all taxpayers are compliant and the amount of tax actually collected. Reliable tax gap estimation will assist the ATO in identifying and addressing problematic areas of the taxation system. It will also enable the ATO to better provide advice to government, parliament and the community.

The ATO ' s progress with tax gap measurement is promising. At the committee ' s first biennial hearing with the ATO in March 2014, the committee was told that the ATO was consulting with international experts regarding the feasibility of tax gap estimations. At the second hearing in October 2014, the ATO announced an implementation of a phased approach to tax gap assessment guided by a definitive timetable. At this hearing, the ATO provided the committee with refreshed estimates for the goods and services tax and the luxury car tax gap. It also outlined its plans for tax gap estimations in a variety of areas in 2015 and 2016. My colleagues on the committee and I look forward to discussing the ATO's progress and results at the next hearing.

The committee plans to next meet with the ATO, its scrutineers, and peak tax bodies in late 2015. The committee has requested that the ATO's submission provide information on its progress in a number of areas, including:

In conclusion, I thank committee members and, in particular, my deputy chair, the member for Rankin, who is going to speak shortly, for their deliberation on these significant matters. I also thank the departmental representatives and stakeholders who appeared at the public hearing for assisting this committee in its important role of scrutinising the Australian taxation system. I would also like to take this opportunity to thank the secretariat headed by David Monk and Susan Cardell and the rest of the team for their terrific support of this committee. I commend the report to the House.

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