Regulatory Roundup May 2015

Got a tax complaint? Talk to the Inspector-General, not the Ombudsman

The way in which people complain about the Tax Office and Tax Practitioners Board (TPB) has changedeffective May 1, 2015. From that date most tax complaints will need to be directed to the Inspector-General of Taxation.

The previous arrangements saw individual complaints from taxpayers dissatisfied with their specific interactions with the Tax Office or the TPB handled by the Ombudsman’s office. The role of the Inspector-General of Taxation (IGT) was to deal only with systemic issues in relation to tax administration.

The Ombudsman will continue to receive complaints concerning public interest disclosures or freedom of information issues about the Tax Office or TPB.

The incumbent Inspector-General, Ali Noroozi, said: “As an independent and dedicated scrutineer of the ATO for the past 12 years, my specialist tax staff are well-placed to help taxpayers and tax practitioners address their individual issues with the ATO or TPB.  We will consider all complaints, from the simple to the complex, including those arising during audits, objections and litigation.”

Commonwealth Ombudsman Colin Neave said he would work with the IGT to minimise confusion or inconvenience to taxpayers, and that arrangements for the transfer of the function were in place.

There are potential benefits to the transfer of responsibilities, if it results in more efficient resolution of tax issues being dealt with from a single office.

“Although individual complaints and systemic issue reviews are two separate functions, they are not mutually exclusive,” said Letty Tsoi, tax specialist at Taxpayers Australia. “Systemic problems arise from a large number of individual issues of the same nature; and on the other hand, systemic problems lead to many taxpayers experiencing the same issue individually.”

Tsoi says information sharing with the office of the IGT across the two functions can benefit both. “However the government must ensure ongoing allocation of sufficient staffing and financial resources to the office of the IGT so that it can properly serve the purposes of each of the two functions,” she said. “The transfer should not result in stretching scarce resources to the detriment of the taxpayer community.

Builders note: Change to your ‘taxable payments annual report’ lodgement

Employers in the building and construction industry need to be aware of a significant change in reporting requirements for your ‘taxable payments annual report’.

If your business is primarily in the building and construction industry, you have an ABN and you make payments to contractors in the building and construction services, you may need to report the total payments you make to each of your contractors for building and construction services by lodging a Taxable payments annual report (TPAR) with the Tax Office each year.

However a significant change announced by the Tax Office is that the report is now required by August 28, not July 21, as has been the case since the TPAR was introduced in the 2011-12 federal budget.Note that the same information is required (that is, for the income year just completed) but the lodgement date has moved.

A business in the building and construction industry needs to report if all of the following apply:

  •     you are a business that is primarily in the building and construction industry
  •     you make payments to contractors for building and construction services
  •     you have an Australian business number (ABN).

Activities covered
The Tax Office says ‘building and construction services’ includes the following activities if these are performed on or in relation to a building or structure, other works, or surfaces or sub-surfaces:

Alteration Destruction Improvement Organisation*
Assembly Dismantling Installation Removal
Construction Erection Maintenance Repair
Demolition Excavation Management* Site preparation
Design Finishing Modification

* of building and construction services

See the Tax Office’s fact sheet for more information.

Australian Industry Report shows an economy in transition

The inaugural Australia Industry Report, which was released late last year, shows an economy being transformed.The flagship report by the Department of Industry’s Office of the Chief Economist provides a unique insight into the two million businesses that make up Australian industry (download the entire 220 page report, or a “highlights” version, here).

The report found that on average around a million workers change jobs every year, and that about 250,000 businesses either enter or exit the market. Perhaps reflecting this volatile environment, various “services” now make up the largest sectors in the Australian economy (such as personal services, business services and financial and insurance services).Two decades ago, manufacturing was the biggest sector, but over the last decade manufacturing employment has shrunk by 90,000. That loss however was offset by more than a million new jobs created in other industries.

The key theme is one of ongoing structural change. Chief economist Mark Cully said upon the report’s release: “We must capitalise on the opportunities provided by new technologies, an emerging Asian middle class and an ageing population.”

The report examines the prospects for the five growth sectors announced by the government in its Industry Innovation and Competitiveness Agenda — food and agribusiness; mining equipment, technology and services; medical technologies and pharmaceuticals; oil, gas and energy resources; and advanced manufacturing.The Australian Industry Report finds these sectors are growing more strongly than other sectors, have high productivity levels and account for more than a quarter of all exports.

DISCLAIMER:All information provided in this publication is of a general nature only and is not personal financial or investment advice. It does not take into account your particular objectives and circumstances. No person should act on the basis of this information without first obtaining and following the advice of a suitably qualified professional advisor. To the fullest extent permitted by law, no person involved in producing, distributing or providing the information in this publication (including Taxpayers Australia Incorporated, each of its directors, councilors, employees and contractors and the editors or authors of the information) will be liable in any way for any loss or damage suffered by any person through the use of or access to this information. The Copyright is owned exclusively by Taxpayers Australia Inc (ABN 96 075 950 284).