Tax gap proves the bar needs to be raised, says IPA
Tax non-compliance amongst individuals is substantially higher than amongst large corporate groups, with figures released by the Australian Taxation Office (ATO) showing the “individual not in business” tax gap sits at $8.7 billion for the 2014-15 financial year.
The figure, which equates to a 6.4 per cent gap as against the 5.8 per cent gap for large corporate groups, is substantially bigger than the corporate tax gap in absolute terms.
Institute of Public Accounts (IPA) chief executive officer, Andrew Conway, said while the report was alarming, 72 per cent of the 858 cases in the ATO’s random sample contained errors.
Conway said the ATO even acknowledged the report was not adequate to define a trend, but served as a reminder that individuals and tax agents must commit to raising the bar.
He said it was “human nature” for individuals to want to maximise refunds and in doing so, may mislead their agent in the course of preparing their return.
“The IPA continues to carry out quality assurance of its members and actively seeks to weed out unprofessional behabiour and reduce error rates,” he said.
Conway stressed that a vast number of tax agents were highly professional, driving home that all tax agents should not be tarred “with the one ATO brush”.
AUTHOR
Anastasia Santoreneos
Recommended for you
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
Morningstar has made two business development appointments to drive the growth strategy of its financial advice software, AdviserLogic.
