Granting more power to ATO ‘could do more harm than good’

The Institute of Public Accountants (IPA) is concerned that the granting of additional powers to the Commissioner of Taxation could do more harm than good in how the ATO is currently perceived by the community.

The Treasury handed down a consultation paper late last year outlining recommendations aimed at tackling the black economy by amending the taxation penalty regime, reversing the onus of proof for some offences, and providing the ATO with more access to data.

The IPA supports the endeavours of the Black Economy Taskforce, but is concerned that increasing ATO’s powers, without sound justification, would only create distrust and reinforce the current community perceptions, it said in its latest submission.

“In the current environment, small businesses and individual taxpayers, whether rightly or wrongly, are sensitive to the wide-ranging powers of the ATO,” IPA general manager of technical policy Tony Greco said.

“These concerns follow reports of unfair influence being exerted. As such, there is a perception that the revenue authority has too much power, which could be open to misuse without appropriate safeguards and oversight.”

Mr Greco noted that to build community confidence in the tax system, the government must ensure that there are safeguards, accountabilities and oversight in place for any new powers granted.

These, he suggested, may include restrictions on how certain powers are to be applied, regular reporting to the government on the exercise of those powers, as well as additional oversight from the Inspector-General of Taxation and the Australian National Audit Office.

“It is hoped that such safeguards will go some way to allaying community concerns that the powers granted are not misused or abused,” Mr Greco said.

Reverse onus of proof

Another concern proposed in the consultation paper, the IPA found, is the reverse onus of proof for certain elements of black economy activity, where the onus is placed on a defendant to disprove certain elements of their offence.

Worryingly, Mr Greco said, such measures could adversely impact the rights of individuals and their liberties.

“We therefore strongly urge that the government give due consideration to any proposal and that caution and restraint be exercised and take time in considering the possible ramifications,” he concluded.

4 thoughts on “Granting more power to ATO ‘could do more harm than good’

  • January 18, 2019 at 1:45 pm
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    the ato present as conditions items now that have nothing in common with the legis it enforces. They need more judicial oversight not more power. the officers of the ato in assessments are rude, condescending planetentiary revisionists who in the absence of legis approving a course of behaviour by the taxpayer, simply make up what they the ato consider to be law.

  • January 18, 2019 at 4:17 pm
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    The reversal in onus of proof in amended assessments has caused some taxpayers to become bankrupts. In a case I know the tax payer and his entities received 27 amended assessment. He was able to successfully defeat 26 but the 1998 assessment which was an arbitrary betterment assessment and quite devoid of reality was such a long time ago that he did not have records going back that far. It was obvious that there was a vendetta against this taxpayer to get him at all costs. Such abuse of power should not be allowed. The onus of proof should be on the Commissioner which may go some way in restoring confidence in the Taxation system.

  • January 18, 2019 at 5:00 pm
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    And who is fighting for the consumer is this country when the Government is eroding the people’s rights????

  • January 22, 2019 at 9:51 am
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    Yes Tonny, I entirely agreed with you. ATO is trying to solve the black economy problem by concentrating their resources on the individuals and small business taxpayers, who are the ones that still straggling in this difficult economy, but regardless of this they are providing a reasonable share of employment to the work force in Australia.
    My question: is the Government and ATO concentrating their efforts in the avoiding of tax to Australia by the Multinational Corporations (eg. Apple,IKEA,ALDI,EBAY,AMAZON) and so many other using the internet and the revolutionary digital world? Many taxpayers know that the Government and ATO are being lobby and bribed by them to keep their eyes closed. I believe that the next Royal Commission should aimed to ATO. Please give your feedback.

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