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TAXATION

Tax Commissioner Chris Jordan flags ATO systems challenge

The Australian Taxation Office (ATO) is embarking on a round of IT upgrades that it hopes will let it deal with new torrents of data – and make its often-criticised public systems easier to use.

David Walker | December 2019

Australian Tax Commissioner Chris Jordan has named “the sheer amount of data” as the ATO’s biggest challenge over the coming years – and flagged a series of IT systems upgrades to extract value from the data flood.

In an interview with INTHEBLACK, Jordan says the ATO’s rising data load “is going to be a big issue for us over the next year”.

“We’re going to get a lot of data. We’ve got to make sure our systems are as resilient as possible. We’ve got to update and upgrade a lot of our systems that are now getting a bit old.”

The tax commissioner says that at peak times, the ATO receives more than seven million data items a day, which he has been told is more than the data load received by banks or insurance companies.

The biggest source of the new data is the ATO’s new Single Touch Payroll (STP) system, which sends businesses’ tax and superannuation information from its payroll and accounting software to the ATO.

Among the biggest IT changes will be the ATO’s merger of its two major accounting systems, which Jordan says will finally give the ATO a single system, with the changeover scheduled for Christmas 2019.

The ATO says many of the changes are part of “our plan to make interactions with us streamlined and simplified”.

Jordan notes that CPAs still recall a previous ATO system cutover that caused “a few days or more of some issues”. He also acknowledges that “there’s going to be some big potential for some problems over the next few years” as systems are upgraded.

“We’re combining our two accounting systems, which never got done in the old change program, at Christmas time this year,” Jordan says. He describes the exercise as “a big deal”.

Tax office data matching

Jordan told INTHEBLACK that the extra data coming to the ATO from STP “will give us a much greater opportunity to understand if people are falling behind in paying the super guarantee”, because it would receive information each payday. The ATO will also be able to match that data with quarterly information from superannuation funds themselves. “We will have a much quicker way of seeing if there’s problems developing,” he says.

At the same time, he says, the ATO’s stream of overseas information has grown dramatically. Among the new sources he listed are:

  • the new Country-By-Country Reporting System ushered in by the OECD’s BEPS (base erosion and profit shifting) project, under which multinationals report for each tax jurisdiction where they do business
  • the Common Reporting Standard, the global standard for automatic exchange of financial account information developed by the OECD in 2014, under which banks and other finance groups report account information on non-residents
  • other information under the OECD BEPS programs
  • information on the transfer pricing policies of large corporates.

“Internationally, we’re getting a huge amount of data that would be useful for us,” Jordan says. “Domestically, we’re receiving a lot of data.”

Merging accounting systems

Jordan says that the merger of accounting systems will bring together the ATO’s system for GST and records like business activity statements with another independent system that currently handles the rest of the ATO’s accounting.

“It will help agents be able to see one account,” he says. “It will help our contact centre staff. It will help us get a better holistic picture of a client ... I think it’s rebuilding trust and confidence in us as a good administrator that you should come to see and should engage with.”

The ATO elaborates in a statement to INTHEBLACK that the merge would “make it even clearer and easier for businesses and agents to access and manage all their tax obligations in a seamless and simplified way”.

“Businesses and their agents will have online access to an extended list of accounts,” the ATO says.

“And the underlying transactions for account balances will be standardised and simplified in line with the suggested improvements that people have been asking for.

“This improvement will also allow businesses and their agents to set up payment plans with us for a greater number of accounts. Also, the vast majority of refunds will now be automated, therefore removing the need for clients or tax professionals to contact us to request the refunds.”

The ATO also confirmed that it is piloting replacements for the AUSkey digital identity and authentication service, saying it knew that AUSkey had been “a bit of a bugbear”. The new myGovID and Relationship Authorisation Manager (RAM) are scheduled to replace AUSkey in March 2020.