Issue No. 56 - Month/Month year
Easing GFC puts ATO focus on SMEs
During the height of the global financial crisis, Michael D’Ascenzo, the Commissioner of Taxation stated that “we live in interesting times”.
Throughout the GFC the Commissioner was focused on supporting growth among SMEs. The ATO allowed struggling businesses to make flexible payment arrangements, sought to be lenient with recovering debts owing to the Commonwealth and allowed taxpayers to seek a favourable remission of interest and penalties on debts owing.
These initiatives helped Australia weather the financial storm far better than other countries and we are now facing our seventh interest rate rise by the Reserve Bank since the start of the financial crisis with unemployment remaining steady. These are key indicators that the Australian economy is no longer under threat.
The times have shifted and so has the approach to tax.
The Commissioner’s Compliance Program for 2010-11, released on 8 July 2010, confirmed that businesses with revenue turnover of $100-250 million over the next four years will be subject to a review.
The Commissioner is also focused on reviewing Highly Wealthy Individuals (Australia residents who control $30 million or more in net wealth) and the “Wealthy Australians” market (individuals and businesses with a net wealth of $5 to $30 million).
The Commissioner was granted with an additional $559 million to enhance the ATO’s audit focus on Highly Wealthy Individuals (HWIs) and Small and Medium Enterprises.
What does the Commissioner’s increased resources and focus on tax audit activity mean for businesses?
Increased scrutiny by the Commissioner means businesses must ensure they are prepared for a review. Some of the tasks they may consider undertaking in preparation for a review include:
• Ensuring tax compliance obligations are up to date;
• Reviewing evidence to support tax positions taken and confirming that c...