GST compliance

Budget Review 2015–16 Index

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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