Today the report from the Inspector General of Taxation (IGOT) on GST refunds was released to the public. The report was provided to the Minister in March 2018.
The IGOT reviewed the end-to-end process involved in refund verification including from initial case selection through to the review and audit activities. Overall, the IGOT found that the ATO’s administration of GST refunds operated efficiently with the vast majority of refunds released without being stopped for verification. Some opportunities for improvement were identified and the IGOT identified that the ATO can streamline its instructions and guidance to staff when interacting with taxpayers, taking into account their circumstances and the adverse financial impacts that delayed refunds can have on their cash flow.
The IGOT made 5 recommendations (comprising 16 parts) to the ATO which were aimed at:
- developing a framework for continuous improvement of its automated risk assessment tools;
- streamlining its guidance to staff and implementing tools to assist them in complying with their obligations under section 8AAZLGA of the Taxation Administration Act 1953;
- enhancing its information requests to taxpayers and providing a channel for pre-emptive provision of such information;
- improving its notification of when taxpayers’ objection rights to the retention of refunds has been triggered and assisting them to lodge such objections effectively; and
- raising awareness of staff and taxpayers about financial hardship issues, appropriately considering them and enabling automated partial release of refunds.
The ATO has agreed in full or in part with all 5 recommendations (11 out of 16 parts).
Particular concerns emerged in relation to the ATO’s use of refund retention to address risks of serious fraud within the precious metals industry. The IGOT acknowledged the seriousness of these fraud risks but also noted the prolonged timeframes to finalise such cases. The IGOT has recommended the Government consider amending the relevant provision to allow the ATO to effectively investigate and address risks of fraud the seriousness of which has been established.
The report can be accessed here.
The response by the ATO can be accessed here.
The response by the Government can be accessed here.