Les Nielson
The Government has announced a three year extension of
funding for the Australian Tax Office (ATO) to continue its current Goods and
Services Tax (GST) compliance activities. It notes that continued focus on GST
compliance will also produce increased tax collections from non-GST sources,
for example increased personal and company income tax collections. The measure
also includes an additional $1.8 billion GST payment to the states.
[1]
This announcement is an extension of similar programs
announced in previous budgets. In the 2012–13 Budget the former Government
announced a two year extension of GST compliance activities, with expected net
revenues of $432 million.[2] In the 2010–11 Budget the
then Government announced a four year GST compliance program of:
... additional activities that promote voluntary GST
compliance and provide a level playing field for Australian businesses.[3]
What are these compliance
activities?
As noted above, the focus of this compliance program has
always been to increase voluntary compliance with the GST provisions. The
current voluntary compliance program focuses on:
-
protecting
businesses, taxpayers and the community, by detecting and dealing with
taxpayers who deliberately avoid their GST obligations
-
enhancing
support and education to encourage taxpayers to willingly meet their GST
obligations.[4]
The ATO has listed the key activities of the current program
as:
improving
activity statement lodgement activity, dealing with GST fraud and evasion and reducing
GST debt.[5]
As this measure is a
continuation of funding for a range of current activities, presumably, future
GST compliance activity will be along the above lines.
Revenue to be raised
The following table shows the estimated net revenue raised
by this continued funding:
Table 1: Net expected revenue—GST
compliance, $m
|
Year
|
2016–17
|
2017–18
|
2018–19
|
|
Total expected revenue
|
717.8
|
860.8
|
948.0
|
|
Total expected expenses
|
586.1
|
700.6
|
794.9
|
|
Net expected revenue
|
131.7
|
160.2
|
153.1
|
Source: Budget paper no.2: 2015–16[6]
In 2011–12 alone, the GST compliance program raised net GST
liabilities of $529 million.[7] Should anything near
this annual outcome continue to be achieved then the above net revenue
estimates of $445 million over the forward estimates period should be easily
met.
It could be argued that these net revenue estimates
significantly under-estimate the amount to be collected. But it is interesting
to note that voluntary compliance with the GST provisions has increased as a
result of this program.[8] That being the case there
may be a smaller number of GST compliance problems to be addressed, leading to,
perhaps, smaller amounts to be gained from continued compliance activities.
Budget measures routinely include announcements of continued
tax compliance activities, with continued GST compliance activities being
unexceptional.[9] Such measures seem to be
effective in maintaining voluntary compliance with the tax provisions.
[1].
Australian Government, Budget
measures: budget paper no. 2: 2015–16, p. 21.
[2].
Australian Government, Budget
measures: budget paper no. 2: 2013–14, p. 26.
[3].
Australian Government, Budget
measures: budget paper no, 2: 2010–11, p. 27.
[4].
Australian Taxation Office (ATO), GST,
Targeting GST compliance: Overview, ATO website, 17 February 2015.
[5].
Ibid.
[6].
Budget measures: budget paper no. 2: 2015–16, op. cit.
[7].
ATO, GST
administration annual performance report 2011–12, 15 February,
2013. Liabilities raised are not actual revenue collected, but are not far
removed from that figure.
[8].
Ibid.
[9].
B Pulle, ‘GST
compliance activities of the ATO and the Budget surplus’, Budget Review 2012–13, Research paper
series, 2012–13, Parliamentary Library, Canberra, 2012.
All online articles accessed May 2015.
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