Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

asked the Minister representing the Treasurer, upon notice, on 25 March 2011:

(1) What is the target timeframe for the Australian Taxation Office (ATO) to reimburse business proprietors with owed monies accrued from the goods and services tax (GST).

(2) Can details be provided of: (a) the greatest length of time it is has taken to reimburse an individual business owner with GST monies owed by the ATO; and (b) why it took so long.

(3) What is the average time taken for a business owner to be reimbursed with GST monies owed.

(4) Can an outline be provided of the percentages of reimbursed monies owed to business owners as per the ATO's key performance indicator, for example, more than: (a) 7 days; and (b) 14 days, etc.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The Treasurer has provided the following answer to the honourable senator's question:

(1) The ATO service standard for processing of credit activity statements (paper and electronic) is 92% within 14 days of receipt in the ATO. Should there be a delay in processing for any reason, interest on the refund amount is payable where the taxpayer has not contributed to the delay.

(2) (a) Not including any confirmed fraudulent GST refund cases, the case that was held the longest by the ATO was 1,093 days. This case related to a GST refund claim lodged in 2008 which the ATO assessed as being a potentially fraudulent claim.

At the time of this case, potential fraud cases involving GST refunds were managed so that no preliminary contact was made until there was contact from the taxpayer querying the progress of the refund or the matter was prioritised for review or audit in due course.

The purpose of verification checks on GST refunds is to ensure that refunds are not released until appropriate as there is a risk in being unable to reclaim the revenue from potentially fraudulent claims. For potentially fraudulent claims the non issue of a refund would necessitate the client to contact the ATO if the refund was legitimate and could be substantiated.

(2) (b) It is acknowledged that this case was not well managed. In this particular case, through a review of aged cases, a letter was finally sent to the taxpayer many months after the receipt of the activity statement, as the taxpayer had not made contact with the ATO. The taxpayer responded to the letter and the refund was issued after a further 231 days due to delays in obtaining requested documents from the taxpayer.

This case highlighted the need for changes to procedures to where a letter or phone call is made within 14 days to potentially fraudulent cases. These improvements to work practices have since been instigated by the ATO to avoid unnecessary administrative delays.

(3) Data available to the ATO does not enable calculation of the average time it takes to reimburse clients with activity statement refunds. However, ATO service standard performance demonstrates that 98% of activity statements are processed within the 14 day standard. Once the activity statements are processed, credits are generally refunded within three business days unless there are reasons for the ATO to hold the refund.

(4) The ATO's current and previous financial year performance against service standards for processed credit activity statements are shown in Table 2 below.

GST is one of the many revenue types included on activity statements and can form part of an activity statement refund. GST refunds are unable to be separately identified from other activity statement refunds.

Table 2: ATO credit activity statement service standard performance

* Year to date performance as at 31 March 2011