New laws put ATO to the test

TAX Commissioner Michael D'Ascenzo has warned his organisation's "scarce resources" will be put under pressure by a flood of new laws, including the carbon and mining taxes and superannuation reforms.

By InvestSMART · 22 Dec 2011

By InvestSMART ·
22 Dec 2011

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"Next year part of our work is implementing these major legislative proposals so we're going to be squeezed in terms of our capabilities across the board," Mr D'Ascenzo said.

Both the carbon price and resources rent tax go into operation on July 1 next year, while the Gillard government's Stronger Super reforms are set for July 1, 2013.

Mr D'Ascenzo said setting up databases required under the Stronger Super reforms was "a really challenging piece of work for us".

He said the policy required the ATO to "insource" backroom work currently done by funds and set up a website where workers can view their superannuation positions.

When complete, the system will also validate the details of accounts and help workers consolidate multiple accounts.

"That's a big risky project for me next year," Mr D'Ascenzo said. "Basically from July 1, 2013, we hope to have an individuals portal up that enables people to do this." He said the project would encourage businesses to do more online, reducing compliance costs and making them more efficient.

The ATO's initial role in administering the carbon price would be limited to fuel tax credits, he said.

"We may well be right in there when you have a permit trading scheme, but at this stage that's not in place for another few years."

However, the new mining tax, which will be imposed on iron ore and coal producers who have annual profits higher than $75 million, will be administered by the ATO.

Asked if the ATO had enough resources to collect the tax, he said: "There is a question . . . you're never going to hear me say we've got all the capability I need to do what we want to do."

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Frequently Asked Questions about this Article…

Which new laws did the article say will put pressure on the ATO's resources?

The article says the ATO will be pressured by a flood of new laws including the carbon price (carbon tax), the resources rent (mining) tax and the Gillard government's Stronger Super superannuation reforms.

When do the carbon price and resources rent tax come into effect according to the article?

The article reports both the carbon price and the resources rent tax are due to go into operation on July 1 next year (as stated in the piece).

What do the Stronger Super reforms require the ATO to do and when are they scheduled to start?

According to the article, the Stronger Super reforms are set for July 1, 2013. They require the ATO to set up new databases, 'insource' back‑office work currently done by funds, and build an individuals portal so workers can view and manage superannuation details.

What will the ATO's individuals portal for superannuation do for workers?

The article says the individuals portal will let people view their super positions, validate account details and help workers consolidate multiple accounts — aiming to make super easier to manage.

What role will the ATO initially have in administering the carbon price?

The article states the ATO's initial role in administering the carbon price will be limited to handling fuel tax credits. A broader permit trading scheme, if implemented, is not expected to be in place for a few years.

Which companies will the new mining tax apply to and who will administer it?

The article says the new mining tax will be imposed on iron ore and coal producers with annual profits higher than $75 million, and the ATO will administer that tax.

Did the ATO say it has enough capability to implement all these new laws?

No. Commissioner Michael D'Ascenzo warned the ATO's 'scarce resources' will be squeezed by the workload and said setting up required systems is a 'big risky project.' He also declined to say the ATO had all the capability it needs to do everything required.

How might these changes affect everyday investors and businesses, based on the article?

The article suggests the ATO's super portal and digital reforms should encourage businesses to do more online, reduce compliance costs and improve efficiency. However, the ATO's resource constraints and the size of the implementation projects could create challenges or risks during rollout.