The Commissioner of Taxation Chris Jordan has given a speech entitled "Why tax can't 'just happen' without you" at Xerocon 2022.
He stated that the ATO's Executive group had recently endorsed a new digital strategy which has a vision for the ATO to be fully digitalised by 2030. This involves 3 "iterations" of tax administration.
Tax 1.0 is where tax reporting occurs sometime after the taxable event, and payment happens even later again. This "affects certainty and is burdensome for businesses and tax agents".
Tax 2.0 is where reporting happens in real-time, but payment is still received later. Single Touch Payroll is a prime example of Tax 2.0. STP works within existing payroll software systems, so reporting to the ATO happens as part of an employers' usual payroll process – sharing data about salaries and wages, pay-as-you-go withholdings, and superannuation directly to the ATO in real-time.
Tax 3.0 is where reporting, payment and real-time compliance checks coincide with the taxable event.
The Commissioner states in the context of Tax 3.0 that "if your business model is high-volume, low-margin, simple tax returns, your business will not be viable in 3 to 5 years".)
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