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HUGE breakthrough for small business – ATO reform

Thursday, November 29, 2018

Late last night the news broke of the Morrison government’s decision to create a Small Business Tax Tribunal. Robert Gottliebsen in The Australian has scooped the story.

We launched a campaign in February last year for a Small Business Tax Tribunal. Obviously, we are hugely pleased to see the Morrison government take this initiative for fair treatment of small businesses.

If small business and self-employed people are to thrive and contribute to our society, the tax collection system must not only be fair but be seen to be fair. Unfortunately, the evidence is overwhelming that the Australian Taxation Office has been abusing its massive powers. It’s a bureaucracy out of control. This is bad for the rule of law, bad for democracy and bad for justice. The public service exists to serve the people, not abuse the people!

It is fair to guess that the dysfunctional politics of the last decade has enabled the federal bureaucracy at the ATO to push a self-interested power agenda. This is to be expected when ‘the people’, through their political representatives, are not directing the bureaucracy closely.

But the Morrison government has stepped up and in this initiative is acting as a government should. The PM is introducing a sensible first-level ‘check and balance’ against the ATO’s unrestrained powers. This is not about reducing tax collection capacity. Rather, it is about creating better efficiency and limiting abuse. In order for tax collection to operate well ‘the people’ must have faith that the system is administered fairly!

The Small Business Tax Tribunal will enable small business and self-employed people (that is, individuals) in dispute with the ATO to:
  • Go to the Small Business Ombudsman for practical help, then
  • Lodge an appeal with the new Small Business Tax Tribunal. It will be outside the ATO and part of the Administrative Appeals Tribunal system. That is clearly independent!
  • *No lawyers will be allowed, including ATO lawyers. This is the important bit. At the moment the ATO plays a very hard ‘lawyer game’ in disputes. This puts the ordinary person at a massive disadvantage. With no lawyers involved, the focus can be on the facts.
  • A small lodgement fee will be required (around $500).
There’s a lot of detail still to be sorted. We will be following this closely and will seek to make active input on the detail. We hope the government will establish the new Tribunal before the next election.

Just a note: If you think that there aren’t many tax disputes, in just one year, 2012-13 for example, the ATO issued 85,000 garnishee notices (that is, forced payment of alleged debts).

Annette Pike commented on 29-Nov-2018 04:43 PM
Trust in the ATO has eroded past the point of no return so this new tribunal is very welcome. Many thanks to the Self Employed Australia for undoubtedly helping along this long overdue development. And of course thanks to the current government for taking the first steps in restoring the taxpayer's confidence in a just and fair tax system.

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