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ATO data helps businesses lift revenue

The Australian Taxation Office believes data will become a powerful tool for businesses to better manage their tax and make the most of deductions.

25 November 2021

Speaking at the ATAX Conference on Tax Administration this week, ATO commissioner Chris Jordan noted that during tax time this year, nearly 370,000 taxpayers were prompted to review their work-related expense deductions based on comparisons to individuals with similar jobs and expenditure. 

He said these prompts caused taxpayers to make adjustments estimated to have a revenue impact of about $37 million.

“This is just the beginning of what data can do to help us manage the individuals and small business markets, and over the next decade we will need to go much further in how we make the most of the data we have available to us,” Mr Jordan said. 

The ATO’s goal is to provide a seamless, streamlined engagement and interactions using digital systems supported by data and analytics. Mr Jordan said a greater use of data improved taxpayers’ capability when it came to managing their own tax and super affairs and it improved the information tax professionals had available to them when helping and advising their clients.

“We receive, match, and pre-fill increasingly large volumes of data from a variety of third-party providers. In 2021, we pre-filled over 89.5 million pieces of data and we’ve expanded our data matching protocols to get more data from third parties to assist with emerging investments like cryptocurrency,” he explained.

“In a sector that is growing rapidly with new investors, we can’t rely on taxpayers knowing they need to keep records of their investment income and capital gains and disclose it on their tax returns.”

Mr Jordan noted that the implementation of Single Touch Payroll (STP) had been hugely successful, and that data made the ATO’s quick and accurate delivery of stimulus payments as part of the COVID-19 response possible. 

“It works with payroll software to allow reporting to happen as part of the payroll process, sharing data about salaries and wages, pay-as-you-go withholdings, and superannuation directly to the ATO,” he said. 

As of 31 October 2021, 806,000 employers were reporting through STP, covering 12.8 million employees.

“We are working hard to improve the way we collect, manage, share, and use data, but we are just scratching the surface. The more sophisticated we become with our use of data, the more we know about our world and the better we can target our support,” Mr Jordan added.

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