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Australian Taxation Office

Australian Taxation Office. Enabling the client experience On Tax Filing day. Tax since 2000. In 2000, Australia engaged in tax reform Moved from various taxes at the state/federal level to GST (collected federally) Created new ways of administering the New Tax System

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Australian Taxation Office

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  1. Australian Taxation Office Enabling the client experience On Tax Filing day 13th XBRL International Conference

  2. Tax since 2000 • In 2000, Australia engaged in tax reform • Moved from various taxes at the state/federal level to GST (collected federally) • Created new ways of administering the New Tax System • Key challenge: leveraging new opportunities to: • Reduce the compliance burden • Make it easier to interact with the Tax Office • increase efficiency through new channels and technology • Enable better business compliance = Improved client experience = Improved tax administration 13th XBRL International Conference

  3. Natural systems 13th XBRL International Conference

  4. Listening to the Community (2002) Easier, Cheaper, More Personalised program (aka the Change Program) Number of other projects (eg eAS) Series of workshops involving tax agents, and business owners, where the Tax Office listened to feedback and workshopped new ideas Number of issues (eg the large backlog in actioning GST credits for business) 13th XBRL International Conference

  5. Opportunity: Putting Business Activity Statements (BAS’s) online • BAS’s introduced in July 2000 • Used to report on a range of obligations in one form, eg: GST, FBT, PAYG(I), PAYG(W) • Reported monthly, quarterly or annually Problem: Good idea, but backlash from business and tax agents: > Monthly/quarterly record keeping instead of annual > Significant time invested in completing BAS > Most businesses require intermediaries 13th XBRL International Conference

  6. Solution: Electronic Activity Statements (eAS) 2 3 1 Message flows Integrated Lodgment Acc’tingsoftware Tax Office Client experience Software uploads data to the Tax Office through a web service Client uses normal accounting software to extract BAS info Client receives a receipt through his/her software list List AS response get AS Get AS AS eAS Web Service Validate AS validate confirmation Submit AS submit receipt 13th XBRL International Conference

  7. Solution: Electronic Activity Statements (eAS) 2 3 1 Benefits: • Aligned compliance obligations with client’s natural systems (ie, work from within business’ accounting software) • Quicker and easier to complete the BAS • Data does not have to be re-keyed into Activity Statement • Reusable process employing web services and industry standards Integrated Lodgment Acc’tingsoftware Tax Office Client experience Software uploads data to the Tax Office through a web service Client uses normal accounting software to extract BAS info Client receives a receipt through his/her software 13th XBRL International Conference

  8. Solution: Electronic Activity Statements (eAS) 2 3 1 Residual challenges: • Use of PKI digital certificates for authentication and non-repudiation • Clients still have two accounts – personal and Tax Office. These have to be kept synchronised manually Integrated Lodgment Acc’tingsoftware Tax Office Client experience Software uploads data to the Tax Office through a web service Client uses normal accounting software to extract BAS info Client receives a receipt through his/her software 13th XBRL International Conference

  9. eAS – the outcome Delivered in 2004 Lessons learned • Get some credibility • Involve infrastructure and security experts from the outset • Establish change control, maintenance and web service version control processes early • Limit business logic to the application/service layer • Involve software providers in planning and design, and make the benefits to them clear • Achieve software industry penetration though service bundling 13th XBRL International Conference

  10. Opportunity: establish a standard business reporting language cross-government • The Babel model • Gov’t agencies have multiple definitions for the same word/data element – sometimes even within the same agency. Some examples1 include: • Small business Salary and wages • Employee Contractor • Businesses spend a great deal of time transforming their natural business data ( ) multiple times to report to multiple agencies using multiple forms • Standard business reporting model • A single reporting language, used across government, that has been: • Normalised (duplicate data elements consolidated to one standard term) • Harmonised (definitions of each term aligned between agencies) • Standardised (adopted by agencies for business reporting purposes) Agency 2 Agency 2 Agency 3 Agency 3 Agency 1 Agency 1 Client - small business Client - small business 1 Regulation Taskforce 2006, Rethinking Regulation: Report of the Taskforce on Reducing Regulatory Burdens on Business, Report to the Prime Minister and the Treasurer, Canberra, January 2006 13th XBRL International Conference

  11. Today’s client experience – a persona • Dave Smith • Owner/manager, Sandwiches, Bagels and Rolls P/L • 28 years old • Has run a successful Melbourne café for three years • Wife and a young son • Spends a significant portion of his time managing government admin compliance • Thinking about opening a second business – a restaurant – but worried about work/life balance, including the extra administrative burden 13th XBRL International Conference

  12. Dave the café owner’s administrative burden - SNAPSHOT Registrations Monthly/Quarterly Annually Other/ad hoc BAS Liquor licence Payroll tax Employee copy of Super Guarantee contributions TFN Declarations Employee info (eg salary) Financial info (eg receipts) Intermediary info (eg journals, balance sheet) Loan application info GST PAYG(W) ITI ITW Company reg ABN Worker’s Compensation Business name Liquor Licence Payroll Tax Food premises licence Outdoor eating area on footpath or road permit Portable advertising board permit Bank account Utilities Insurance ATO Dept of Justice SRO Staff ATO ABS ASIC Dept of Justice SRO Work-cover Staff Privatesector ATO Centre- link Suppliers, customers Tax agent Privatesector ATO ASIC ABR Work-cover Dept of Justice SRO City ofMelb. Private sector Income Tax Return Pay-as-you-go withholding annual report FBT Annual Return Café and Restaurant Annual Survey ASIC Annual Statement Business name renewal (every 3 years) Payroll tax Annual return Workcover annual report Payment Summary Insurance renewal Federal State Local Other 13th XBRL International Conference

  13. Desired shifts • Business • Less time spent by businesses or their accountants preparing reports for various agencies • Less data to be reported and transformed • Greater amount of automation possible through their business software • Ability to satisfy their government reporting requirements through their business record keeping software (natural system) • Accounting community • less time preparing regulatory reports for various agencies • More time to help business manage • Accounting and record keeping that can be used internationally for reporting and financial management (including IFRS). • Software developers • Better experience for users of their software • Ability for their users to interact directly with the government from within their software • Government • Common set of information being sought from business • Cheaper to gather and store information • More consistent reporting, better data quality • More reuse and responsiveness to change 13th XBRL International Conference

  14. ATO ATO SROs SROs ASIC ASIC Standard Business Reporting – proposed model • Single data update replaces a number of forms • Shift to transacting with gov’t rather than a number of agencies • No duplicate information/processes required • >> Decreased burden on business ATO StandardBusiness Reporting “Hub” Data in standard taxonomy State Revenue Offices Centrelink Other possible solution architectures: OR Data flows direct to target agency One agency (eg ATO) receives data and supplies other agencies 13th XBRL International Conference

  15. Standard Business Reporting – next steps • Follow on and learn from the success of the Netherlands Taxonomy Project • Work with stakeholders (public + private sectors) • Undertake taxonomy analysis and definition • Probable project timespan: 2-3 years • Early deliverables – employment declaration/Payment summary in 2007 13th XBRL International Conference

  16. Future challenges… • Ensuring that the client experience remains central to thinking in e-Government strategy • Maintaining the “One Government” approach 13th XBRL International Conference

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