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Tax Commissioner gives key speech praising the ATO

Sunday, March 17, 2019

Last Thursday (14 March), the current Australian Taxation Commissioner delivered a major speech.

He said of himself:

I would like to think I’m more involved in a noble function of democracy, not the strong arm of an oppressive state…. Perception is critical…
He said of the ATO:
… while the ATO is not perfect, when mistakes are made, we should own them and, if necessary, implement improvements.
But he turned on critics of the ATO saying:
… much of the media commentary of 2018 was so disappointing. While we have done much … to reassure people it is OK to come and talk to us about their problems … some media was doing the opposite. Particularly the Four Corners report on the ATO…
And he reasoned that
For those who are antagonistic towards us, and our reform program, … who see the ATO as something of an enemy, I believe community sentiment is against you and will increasingly become more so.
The Commissioner also pointed out that, as part of the ATO reform program,
From 1 March 2019, there is a new small business division at the Administrative Appeals Tribunal, offering a low-cost avenue for small businesses who dispute our assessment of their tax position. Generally these hearings will be without lawyers, but if lawyers are required, the ATO will cover the cost of equivalent legal representation for the small business.
But there is a problem with this reform that we wrote about in The Australian on 27 February. Under the draft rules for this new Small Business Tax Tribunal, the use of lawyers by the ATO and the covering of the costs of a small businesses person’s lawyers is totally at the discretion of the ATO. This means that the ATO retains all power. The ATO’s unaccountable power is at the root of the 2018 media criticisms of the ATO, particularly by Four Corners.

In the spirit of democracy and the ATO not being a strong arm of an oppressive state, and in the spirit of the ATO owning its mistakes and making improvements, we call on the Tax Commissioner to fix this glaring power imbalance.

Specifically, we ask the Commissioner to ensure that the following recommended wording be inserted in the ATO’s Small Business Tribunal Practice Statement:
In most cases, other than test cases for example, legal representatives are not to act for either the ATO or the small business… If the ATO seeks to put legal written submissions, the ATO must fund the small business for legal opinion up to an amount equal to that expended by the Commissioner on its internal and external legal services.
Such wording would demonstrate real reform by the ATO. It would significantly quieten the ATO’s critics who are ‘agnostic’ about the ATO’s reform program.

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