Inspector general seeks abolishment of oral rulings

The inspector general of taxation has recommended the abolishment of the oral rulings system to the Australian Taxation Office (ATO), in view of the continuing low level of its usage.

The recommendation was published in the inspector general’s ‘Review of aspects of the ATO’s administration of private binding rulings’, which the financial services minister, Bill Shorten, released to the public yesterday.

A private binding ruling is made when the ATO gives binding advice to a taxpayer that helps the taxpayer make a more accurate self-assessment of their tax liabilities. The oral rulings system is similar to a private binding ruling, except the advice given is oral, not written.

In its response to the inspector general’s report, the ATO noted that due to the legislative nature of the suggestion around the abolishment of the oral rulings system, it was a matter for the Government.

Shorten said he had asked the Treasury to assess the current suite of advice products available to individual taxpayers that have simple affairs, adding he had also asked the department to seek the views of taxpayers.

“It is important that we continue to look for options to simplify the tax system where possible,” Shorten said.

The other five recommendations made in the report were administrative matters and the responsibility of the ATO. The inspector general also found that the taxation office had implemented all the agreed recommendations from the early 2008 inspector general report.