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Tuesday, 10 September 1996
Page: 3919

(Question No. 480)


Mr Filing asked the Assistant Treasurer, upon notice, on 26 June 1996:

(1) What was the total number of PAYE tax returns processed by the Australian Taxation Office (ATO) in 1995-96.

(2) What percentage of the tax returns referred to in part (1) were audited.

(3) What percentage of audited returns required a downward adjustment to the sum claimed as work related expenses (WRE).

(4) What was the average reduction in the cases referred to in part (3).

(5) What total additional revenue was raised as a result of the adjustments.

(6) How many returns requiring an adjustment for the sum claimed for WRE required an upward adjustment.

(7) What was the average increase in WRE allowed in the cases referred to in part (6).

(8) What total revenue was forgone as a result of the adjustments.

(9) What total sum was claimed as WRE by all PAYE taxpayers in 1995-96.

(10) What was the total number of employees at the ATO in 1995-96.

(11) What was the average income of ATO employees in 1995-96.

(12) What was the total cost of wages and salaries to the ATO in 1995-96.

(13) What percentage of ATO employees work in the area which deals with WRE and revenue recovery associated with WRE.


Mr Costello —The Assistant Treasurer has provided the following answer to the honourable member's question:

For the purpose of answering this question the figures I have given are for `Individual' tax returns where tax instalment deductions have been made.

(1) As at 30 June 1996, there were 7,634,654 tax returns processed by the ATO in 1995-96 (relating to incomes earned in 1994-95).

(2) 0.7% of tax returns referred to in part (1) were audited for the 1994-95 income year.

The ATO audit program in relation to individual taxpayers, is primarily based upon a process of advising taxpayers prior to the lodgment of their return, that their return is to be reviewed by our audit staff. Documentation supporting claims is required at the time returns are lodged. This process results in less adjustments to returns because taxpayers take more care having been given prior warning of our intention to review their claims. There were 47,564 such audits conducted in 95/96 (relating to 1994-95 income year) on WRE.

Additionally, 6052 (traditional) post issue audits were also conducted in relation to Work Related Expenses.

Review activity by audit staff was undertaken in relation to a further 233,661 PAYE taxpayers on matters other than Work Related Expenses eg Income matching cases.

(3) Pre issue audits: 6102 downward adjustments or 12.8%. Post issue audits: 2779 downward adjustments or 45.9%.

(4) Pre issue Audits: Average adjustment $1291; Post issue audits: Average adjustment 3521.

(5) Total revenue: $6.76M tax and $1.95M in penalties and interest.

(It should be noted that the total revenue gained as a result of the ATO review of returns in 95/96 (for 1994-95 income year) is $126M. For WRE, the total revenue gain as a result of the ATO review of returns is $52.6M. This takes into account the revenue attributed to the reduction in WRE claims for those taxpayers subject to pre-issue review when comparing their change in claim levels to the change in claim levels of all other taxpayers claiming WRE).

(6) 105 cases required an upward adjustment

(Another 39,600 taxpayers (approximately) increased their claims for WRE by self amending their claim, after they lodged their tax returns).

(7) The average increase related to the 105 cases was $682

(8) $25,096

(9) $5,525,136,000

(10) 17,612 average staffing level for 1995/96 (includes SES)

(11) $38,450

(12) $677,141, above the line (incl SES); $139,874, below the line; $817,015 total salaries

(13) 1.5% (246.8 out of a total of 16800)