May 23, 2013

Memo to Hockey: what’s really wrong with the Tax Office

Joe Hockey wants to shake up the Australian Taxation Office. It's welcome news to accountants and taxpayers, but he'll need more than rhetoric to fix the ATO's problems.

Chris Seage — Tax consultant and former ATO audit manager

Chris Seage

Tax consultant and former ATO audit manager

Joe Hockey has just discovered something that most taxpayers already knew: the Australian Taxation Office doesn’t play fair, and is most decidedly not independent.


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9 thoughts on “Memo to Hockey: what’s really wrong with the Tax Office

  1. The Pav

    I oredered a Ranger last year and it was supposed to be delivered end of March due to “production issues”

    Here we are in May and I still haven’t got it.

    I don’t know about Ford being able to make cars in Australia but they sure seem to have trouble making them elsewhere and what kind of business model is it when you sell some thing but then don’t deleiver for ages.can’t be good for the cash flow.

  2. wahoo

    As a small business owner who has been on the receiving end of ATO bullying all I can say is it’s about bloody time! There is something wrong when the ATO can apply fines for late lodgement of GST larger the amount owing and charge interest at the same time! Like bank late fees there should be a class action to hold them to account.

  3. Barrie O'Shea

    Chris Seage must deal with a different group of small businesses from the ones that I have seen in 40 years in small business. Time and again we see businesses that have large unpaid GST, group tax, income tax and superannuation liabilities. They have a huge cash flow advantage over their competitors. They continue trading because of this and incur larger debts with their suppliers before they eventually fail. These liabilities are hidden from creditors because of “privacy” provisions. The remedy is to require the ATO to give trade references and to give the ATO adequate resources to collect the money which is due to their employees and the wider community.

  4. Delerious

    I find this attack on the ATO pretty offensive. In such a complex area trying to handle all the stupid decisions made by our politicians I think they do a good job all things considered. I am a small business owner and I have never had a problem with the ATO, to be honest I think they do a pretty good job even with the few teeth they have.

  5. wahoo

    I’m guessing the ATO spend an extraordinary amount of time chasing outstanding BAS with SOHO operators who in the big scheme of things have relatively small debts.

    How about letting businesses with a turnover of $200,000 a year or less opt out? Then the ones who lack the resources to collect GST have a choice instead of being caught in a spiral of fines and interest charges. A simplified BAS would be good as well, 10% on everything would be a good start.

  6. Johann3

    Given the general recognition that the challenge for the developed world is to get big business to pay their taxes, churns out this article that raises all of the prejudices held by some quarters in the business community about the tax office.

    I don’t doubt that the issues for taxpayers embroiled in some poorly undertaken audit are serious and the ATO should be held accountable. It is questionable logic to use these instances as a basis for supporting a structure that will ostensibly help business however is more expensive and will reduce the effectiveness of the ATO.

    The challenge is not about weakening the tax office but making it work better for the community. Always.

  7. Schnappi

    pay ya tax ,end of story

  8. Ken_001

    We have seen the invasion of Iraq for revenge against an enemy of Father, and this will be a revange against closure of cousin’s small business. The actual sufferers are the fixed paid employee of the GST base tax system they pay Income Tax +GST ( Double dip).

    Sall business claim every expenses including personal expenses as tax exempted expenses. Cash economy is dominated by small businesses, some community follow an ethics that “a dollars comes to the community will not get out without changing seven hands” . These 7 exchanges are without the GST or any income tax. You can see these people if you got to home auction, car auction etc.

    The poor fixed income earners has no lobby no money to donate to the poles & their parties . Who is going to ask the polies to reduce their Perks and Jail the crooks like Obeds, Toolboy, Tripody etc etc . All tese ICAC investigation will just costs taxpayers and at the end a big end layers will get them off the hook and we will end up paying compansation.

  9. leacalais

    I don’t know when Chris Seague worked in the ATO but I think he needs an update. I have met a lot of ATO staff, and still yet to meet an ‘overzealous’ one. ATO staff are public servants have no personal interest in what happens to anyone – not Paul Hogan, or any one else who thinks they are above the law.

    Hundreds of thousands of audits are done every year and if a small number go wrong it is due to lack of resourcing and poor training – no one is ‘out to get you’. Today’s auditors don’t have time for that – they need to be working on audits that will produce a result. There’s no point wasting time on a path to nowhere when there is another case in the queue.

    99% of complaints made in the press are down to paranoia and people’s over developed sense of their own importance. If Joe Hockey or one of his mates has had a bad audit experience, he might want to remember when he is cutting resourcing out of the public service next year, that an auditor under pressure is not doing the best job they could.

    Every person who whinges to the press about their ‘unfair treatment’ has already lodged a formal complaint and been to the ombudsman, so whatever could be fixed has been, and anything after that is just sour grapes.

    A lot of the problems in the audit areas are the result of insufficient feedback coming from the review areas – not enough time spent on fixing the systemic problems that ARE there. Separating the review areas from audit, even more than they already are, will just make this problem worse.

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