Strategies for widening the tax net

1. Strategies for widening the tax net Ways to promote and enforce registration of hidden taxpayers Presented by Cameron Sorensen Assistant Commissioner Cash Economy and Small Business Assistance Program Australian Taxation Office 3 March 2010

2. Ways to promote and enforce registration of hidden taxpayers • Small Business Assistance Program • Data matching • Tax Evasion Referral Centre • Letter program

3. Small business assistance program

4. Small business assistance program • Why assist small business? • Small business assistance framework • Small business lifecycle – promoting registration obligations

5. Why assist small business? • Increase certainty • Develop relationships • Increase voluntary compliance • Minimise cost of compliance ‘Prevention rather than cure’

6. Small business assistance framework • The ATO has developed a framework for how we interact with micro businesses. • How we understand the micro market • How we develop products, services and assistance • How we partner with other service providers • How we communicate to micro businesses

7. Small business lifecycle – promoting registration obligations • SBAP provide support and assistance throughout the lifecycle of a business • Tools and publications • Building partnerships ato.gov.au/smallbusinesssupport

8. Data matching program

9. Overview • What can data matching do? • Selecting good data • Getting the most from data

10. What can external data matching do? • Identify hidden businesses • Indicate those not doing the right thing • Risk analyse large populations • Affect behaviour of large numbers of taxpayers

11. What can external data matching do? (continued) • Leverage through communication • Improve community confidence and promote a level playing field • Cooperation, collaboration and co-design with data providers.

12. Selecting good data • What is available? • How useful is the data? • Does it treat the right taxpayers? • Does it identify the right risks? • Can we identify the taxpayer? • Is there any evidence that the risk exists and that data matching will work? • How can we use data?

13. Getting the most from data • Spending more than reported incomes • Cars, property, gambling • Ratios that don’t look right • Transactions that can be checked

14. Getting the most from external data • Identify non-lodgers and unregistered entities that can‘t be matched • Can support identification of unreported income • Provides supporting information for auditors and educators

15. Tax Evasion Referral Centre

16. Sources of information The centre receives information from: • the community • other agencies Forms of allegations 08/09: • 30,227 phone calls • 7,392 correspondence (letters and faxes) • 4,405 web form on ato.gov.au • 17,964 Centrelink referrals

17. Uses of information • Has the potential to identify unregistered taxpayers • Used in case selection • Provides additional information to auditors • Intelligence activities

18. Letter program

19. Sources Registered taxpayers • include tax payer specific information Hidden taxpayers • identified through data matching

20. Increasing visibility • Effective coverage • Targeted to tax payers circumstances

21. Program effectiveness • Responses to campaign • voluntary adjustment requests • intelligence from information returned • self adjustments

22. Questions? • © COMMONWEALTH OF AUSTRALIA 2010 • This presentation was current in March 2010