THE Tax Commissioner, Michael D'Ascenzo, has warned that 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.
"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 the 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 Tax Office to "insource" backroom work 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.
He said the project would encourage businesses to do more online, reducing compliance costs and making them more efficient.
The Tax Office's initial role in administering the carbon price would be limited to fuel tax credits, Mr D'Ascenzo 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 with annual profits higher than $75 million, will be administered by the Tax Office.
"We've got a big responsibility in relation to mining tax," Mr D'Ascenzo said. He said the Tax Office was drawing on a senior group of people who had been close to the development of the tax.
"My role is to manage resources sensibly so that where there are priorities such as a new tax measure that's part of the government's framework ... we allocate from our scarce resources sufficient resources to handle that as well as we can," he said.
How companies value their assets loomed as the key flashpoint with industry, he said. "So we've been working with the mining companies as to possible valuation methodologies. It's quite a complex area in the whole mining game."
Drafts of valuation models preferred by the Tax Office were already circulating, he said.
"What we've been trying to do is provide some principles and then hope that commonsense applies in the way that they are used."
Frequently Asked Questions about this Article…
Which new laws did the Tax Commissioner say will put pressure on the ATO's resources?
The Tax Commissioner warned that a flood of major laws – including the carbon price, the resources rent (mining) tax and the Gillard government's Stronger Super superannuation reforms – will put the ATO's scarce resources under pressure as they are implemented.
When do the carbon price, resources rent tax and Stronger Super reforms start operating?
According to the article, the carbon price and the resources rent (mining) tax are due to start on July 1 next year, while the Stronger Super reforms are set to begin on July 1, 2013.
What role will the ATO play in administering the Stronger Super reforms and how will that affect superannuation accounts?
The ATO must set up databases and a website under Stronger Super to let workers view their superannuation positions, validate account details and help consolidate multiple accounts. The Tax Office will insource back‑room work previously done by funds to deliver these services.
How involved will the ATO be in administering the carbon price scheme?
The ATO's initial role in the carbon price will be limited to administering fuel tax credits. A full permit trading scheme could bring the ATO in more deeply, but the article notes that any permit trading system is not expected to be in place for several years.
Which companies will be affected by the new mining tax that the ATO will administer?
The mining tax will apply to iron ore and coal producers with annual profits higher than $75 million, and the Tax Office will be responsible for administering that new mining tax.
What does the Tax Commissioner say about the ATO's capacity and how resources will be managed?
The commissioner said the ATO's capabilities will be squeezed across the board by these major measures. He emphasised that his role is to manage scarce resources sensibly and allocate sufficient staff to high‑priority new tax measures as part of the government's framework.
Why are valuation methodologies a flashpoint between the ATO and mining companies under the new tax?
Valuing mining assets is complex, and how companies value their assets is a key flashpoint for the mining tax. The article says the ATO has been working with mining companies on possible valuation methodologies, and drafts of preferred valuation models were already circulating.
What practical effects might these ATO changes have for everyday investors and businesses?
The ATO's projects — such as the Stronger Super database and online systems — are intended to make it easier for workers to view and consolidate super accounts and to encourage businesses to do more online, which could reduce compliance costs. However, implementing multiple big reforms at once may mean the ATO faces capacity pressures during roll‑out.
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