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ATO - Information Management & Analytics for Differentiated Service

Explore how the Australian Taxation Office (ATO) uses information management and analytics to provide a differentiated service, focusing on risk-based resource allocation. Learn how this approach makes tax compliance easier, cheaper, and more personalized for taxpayers.

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ATO - Information Management & Analytics for Differentiated Service

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  1. www.ato.gov.au The Australian Taxation Office Information Management and Analytics Dr Richard Tait – IT Strategic Advisor Australian Tax Office

  2. A snapshot of the ATO We collect 92% of the Australian Government’s revenue. We manage:  10 Million personal taxpayers  3 Million business and non-profit organisations, and  regulate around 240,000 self managed super funds. Each year we handle over 11 million telephone and up to 1 million written enquiries.

  3. The ATO’s Strategic Direction and Business Model call for a differentiated service OUR BUSINESS MODEL We verify compliance using a risk management approach We manage relationships and differentiate accordingly We shape internal and external capabilities Individuals and Businesses self - assess  We make it as easy as possible to comply     We allocate our resources based on risk

  4. The ATO’s Change Program is a key part of this strategy Working with the Community to make paying tax: Easier - Easier for clients to comply with their obligations Cheaper- By reducing the workload, time and effort to meet obligations More personalised - Offering products that make sense to clients • This requires services that are differentiated: • To make taxpaying easier for low risk, compliant clients • To place more focus on high risk, non-compliant clients

  5. The behaviour of taxpayers is driven by many forces … Sociological Economic Industry Business Psychological

  6. Create pressure down This means that we need different compliance strategies for different behaviours Have decided not to comply Use the full force of the law Don’t want to comply Deter by detection Try to, but don’t always succeed Assist to comply Attitude to Compliance Compliance Strategy Willing to do the right thing Make it easy

  7. Information Management Data Analytics Rules and Treatments Information Management and Analytics are key to delivering this step change Differentiated Service Risk based resource allocation • For the taxpayer • Individual • Company • Other

  8. Information Management Data Analytics Rules and Treatments Differentiated Service Risk based resource allocation Information Management • The first priority is high quality information • This requires management of work practices, client interactions, accountabilities, data sources, data flows and technology • The work is expensive and the business case is unexciting in isolation, but it is essential for the end result

  9. Information Management Data Analytics Rules and Treatments Differentiated Service Risk based resource allocation Analytics • Analytics requires high quality data and a clear derivation path, so that the resultant actions are defensible as fact based • The Analytics Capability is as much about human intelligence as technology – neither can succeed without the other • A key risk is that the outputs will not be understood and/or used

  10. Information Management Data Analytics Rules and Treatments Differentiated Service Risk based resource allocation Rules and Treatments • Once you have your potential decision points, you need to turn them into rules and treatments e.g. “If the client is a Plumber, does not use a tax agent and is claiming more than $5,000 in work-related expenses – request a detailed schedule before approving a refund” • This requires “rules engines” of widely varying levels of sophistication • Key issues here are: throughput, performanceand management of large numbers of rules

  11. Information Management Data Analytics Rules and Treatments Differentiated Service Risk based resource allocation Finally, the differentiated service … • Now, how will you justify your actions to your clients? - “The reason we are taking longer to process your refund is that we think you are high risk” • Are the services consistent with the level of real risk? • Are they fair relative to other taxpayers? • What about the mistakes?

  12. Summary • The ATO is strongly committed to creating a differentiated treatment of taxpayers, consistent with their attitude to compliance • This will allow resources to be focused on high-need areas • It will reward taxpayers with good behaviour by fast, easy service • This relies completely on high quality information, sophisticated analytics and excellent execution

  13. …or email: richard.tait@ato.gov.au Questions?

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