SEA Assessment and Comments
On the ATO
Perception of Fairness Research: Disputes
For ATO covering disputes from 1 July 2016 to 30 June 2017
The survey report is here (obtained under FOI).
Our Summary of the Report
Cost to the taxpayer
$973,530 (excluding GST) for 3 surveys.
Did the ATO treat the Taxpayer fairly in managing and resolving disputes?
Individuals and micro businesses who had tax disputes from 1 July 2016 and 30 June 2017.
670 telephone interviews each of 13 minutes in 2017.
Outcomes detailed in the report
Perceptions of fairness in disputes:
- 50% in 2014–15
- 56% in 2016–17
Perceptions where taxpayer strongly agree they have been treated fairly:
- 19% – 2015
- 26% – 2017
Percentage of taxpayers who use tax professionals:
- 83% – 2015
- 93% – 2017
- Confident the ATO had correctly understood their point of view 64%
- Kept well informed about progress of the dispute 49%
- Process independent and free from bias 74%
- Time taken for the final decision was reasonable 55%
- Final decision was fair 62%
- Straightforward and honest communication 69%
- Costs (time, money and resources) was reasonable 39%
- Transparent internal discussions 47%
The ATO presents the report as a positive because there has been an increase in taxpayer perceptions of fairness since 2014. But if the ATO were a business, the report would be considered a disaster and would surely be cause for major sackings in the business/ATO to the top of the executive levels.
No commercial business would survive in the market place if 44 per cent of its customers considered that they were treated unfairly by the business. The business would be out of business. The only reason the ATO continues is because it has a monopoly over tax collection. As an organisation, the ATO should be ashamed of the results.
The ATO’s unfairness has pushed more people to use accountants—now at 93 per cent of people surveyed. We hold the view that this shows that the administration of tax has become so unfair that people feel they need an accountant. This is diametrically opposed to government policy, which is to make returns simple and easy. This again demonstrates failure by the ATO.
When key indicators from 2017 that the ATO views as ‘success’ are viewed from an alternative perspective, the unfairness of the ATO is glaring:
- 36% said that the ATO did not understood their point of view.
- 51% were not well informed about the progress of their dispute.
- 26% said that the process was biased and not independent.
- 45% considered that the time taken for the final decision was unreasonable.
- 38% said that the final decision was unfair.
- 31% considered that the communication was not straightforward or honest.
- 53% said that the internal discussions were not transparent.
And, most significantly:
- 61% said that the costs (time, money and resources) were unreasonable.
These outcomes reflect our experiences when assisting self-employed people in dispute with the ATO. We say that the ATO’s processes are systemically unfair.
And the biggest factor is that the cost of a defence against ATO attack is so unreasonable that it puts self-employed, small business people at a near-crushing disadvantage. Our observation is that the ATO uses this cost pressure to push people into making settlements.
The survey results add justification to our calls for major reform of the ATO.