Federal Budget 2022-23: Tax compliance

The government has announced a range of funding to support its deregulation agenda. A variety of efforts to modernise reporting systems will also be implemented as part of the digital economy.

Government deregulation agenda

The Government has announced wide ranging reforms to fees attached to registry services. As part of this, fees associated with Australia’s Business Registers will be streamlined as company registration and lifecycle management moves to a modernised platform (scheduled for September 2023). This will simplify registry compliance obligations, improve the currency and accuracy of registry information, and promote transparency and counterparty trust in commercial activities.

Other initiatives furthering the Government’s deregulation include:

• $52.5 million over 5 years from 2021-22 to reduce regulatory burden for industry in the environmental assessment process through the national rollout of the Digital Environmental Assessments Program, supported by a National Biodiversity Data Repository;

• $47.3 million over 15 years from 2021-22 to the Clean Energy Regulator to simplify existing compliance and assurance activities for the Emissions Reduction Fund and the Renewable Energy Target to reduce manual compliance reporting;

• $19.9 million over 4 years from 2021-22 to the Australian Bureau of Statistics to develop a new reporting application to enable businesses to submit surveys on business indicators directly through their accounting software;

• $17.5 million over 3 years from 2021-22 to enhance the digital capability of Australia’s offshore oil and gas regulator and titles administrator;

• $11.2 million over 5 years from 2021-22 to continue work in reducing the regulatory burden for business arising from compliance with mandatory safety and information standards under Australian Consumer Law;

• $1.4 million over 2 years from 2022-23 to the Attorney-General’s Department to progress a national approach to modernise the execution of common legal documents;

• the Government will make permanent the temporary tariff concession that is currently in place for certain medical and hygiene products to treat, diagnose or prevent the spread of COVID-19, saving $6.9 million over 4 years from 2022-23; and

• the Government is also providing significant benefits to fuel and alcohol industries through streamlining the administration of fuel and alcohol excise and excise-equivalent customs duty. In this context, the Government will take action to reduce administrative overheads and streamline businesses’ engagement with the Australian Taxation Office and the Australian Border Force. This will support business growth in Australia’s fuel and alcoholic beverage manufacturing sector.

Tax avoidance taskforce

The Government will provide $325.0 million in 2023-24 and $327.6 million in 2024-25 to the ATO to extend the operation of the Tax Avoidance Taskforce by 2 years to 30 June 2025. The Taskforce was established in 2016 to undertake compliance activities targeting multinationals, large public and private groups, trusts and high wealth individuals.

Deferral of Shadow Economy

The Government will defer the start date of the Black Economy – strengthening the Australian Business Number (ABN) system measure, announced in the 2019-20 Budget, by 12 months to assist with integration into the Australian Business Registry Services (ABRS).

Modernising systems

Digitising trust income reporting and processing

The Government will digitise trust and beneficiary income reporting and processing, by allowing all trust tax return filers the option to lodge income tax returns electronically. This measure will increase pre-filling and automating ATO assurance processes, and reduce the compliance burdens on taxpayers.

Smarter reporting of Taxable Payments Reporting System data

The Government will provide businesses the option to report Taxable Payments Reporting System data (via accounting software) on the same lodgement cycle as their activity statements. It is anticipated that systems will be in place by 31 December 2023, with the measure to commence on 1 January 2024, for application to periods starting on or after that date. This measure will increase the accuracy and timeliness of reporting while lowering compliance costs for taxpayers. The Government will consult with affected stakeholders, tax practitioners and digital service providers to finalise the policy scope, design and specifications of the measure. This measure is estimated to result in an unquantifiable impact on receipts over the forward estimates period.

Modernising pay as you go instalment systems

The Government will enable companies to choose to have their pay as you go (PAYG) instalments calculated based on current financial performance, extracted from business accounting software, with some tax adjustments. This will support business cash flow by ensuring instalments reflect current performance.

Modernising other reporting systems

The Government has also committed $6.6 million over the forward estimates period for the development of IT infrastructure required to allow the ATO to share single touch payroll (STP) data with State and Territory Revenue Offices on an ongoing basis. The funding will be deployed following further consideration of which states and territories are able and willing to make investments in their own systems and administrative processes to pre-fill payroll tax returns with STP data, to reduce compliance costs for businesses.