Over several years the ATO has been actively expanding its data-matching initiative to drive compliant behaviour and protect tax revenues. As part of the data-matching process, the ATO is able to source and match information held across a range of federal, state, local and international government agencies as well a range of non-government organisations.
How much interest did the bank pay me this year – the ATO already knows.
How much income in the form of dividends – the ATO already knows.
What about reporting capital gains on an investment property or shares I may have sold – they already know when and for how much they sold.
What if I had of earned some tax free income working in the Middle East – they’d already know.
The range and sources of the data available to the ATO is increasing. The introduction of the ‘Taxable Payments Annual Report’ for the Building and Construction industry will provide increased data matching opportunities between what contractors and their customers report. It is possible that similar reporting regime will be extended to other areas of the economy where the risk of non-compliance is high. A similar reporting regime already exists in the USA, but the obligation to report on payments to suppliers isn’t restricted to specific industries.
And what about all the income I earned from selling stuff through eBay – they may already know.
So is Big Brother and his data-matching a good thing?
If you have traditionally taken a more ‘creative’ approach to your tax declarations then this is bad and it will only get worse. If like me, you are reasonable fair minded tax payer that does the right thing then there is significant upside:
- The ATO has identified and collected hundreds of millions of dollars that would otherwise be lost
- It is much harder for recipients to claim welfare benefits to which they are not entitled
- Everyone is more likely to be paying their fair share of tax.
Personally, the main benefit is that I no longer need to spend copious amounts of time hunting down all that fiddly information required to complete my tax return. Now I simply log on the e-tax lodgement website and the ATO has done all the leg work for me.
So what do you think, is the ATO’s ‘all seeing all knowing’ a good thing or a bad thing?