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Tax Office's GST system out of control.



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David Cox MP Shadow Minister for Revenue and Assistant Treasurer Member for Kingston Contact: David Cox 0418 847 830 or Angela Jackson 0417 815 124

TAX OFFICE’S GST SYSTEM OUT OF CONTROL

If you are having trouble with your BAS statement, it may give you some satisfaction to know that the Tax Office is having problems too.

The ANAO report revealed that only 30 per cent of tax agents are happy with their relationship with the ATO. 62 per cent of small businesses resent the time that they spend on filling out the BAS form and 37 per of small business continue to have major difficulties filling out their BAS form.

But the ANAO report also revealed that the tax office is having its own problems administrating the GST. One in five Business Activity Statements can not be processed mechanically, but must be hand checked. That is 2.66 million forms out of the 15 million

activity statements lodged annually

The report highlights major IT systems failures at the ATO, which are undermining GST administration:

If the ATO does not have these processes in place, it will be unable to provide assurance that business rules are applied to activity statements correctly, and that activity statement information is being processed efficiently.

ANAO, The Australian Tax Office Collection and Management of Activity Statement Information, Page 80

The ATO has no way of telling exactly what its processing systems do - they have never bothered to write down the full list of specifications which run the equipment. This is a serious issue, as these specifications enforce the tax law for the majority of taxpayers.

The systems breakdown 6800 times a year, with 130 of those breakdowns considered critical.

These are major issues which undermine the administration of the entire GST system, and show that its not just small business grappling with GST compliance but the ATO itself.

While this may not be a ‘destiny’ issue for the Treasurer, these issues determine whether the tax system has integrity and is efficient. These are the issues which the Treasurer has continually ignored for the past 8 years.

CANBERRA 3 March 2003