Tuesday, August 14, 2012

Tax watchdog worried about ATO's monopoly power

By Business editor Peter Ryan

The man keeping an eye on the Australian Tax Office has raised concerns about the agency's monopoly power, likening it to Telstra's predecessor Telecom.

The Inspector-General of Taxation, Ali Noroozi, is calling on taxpayers to come forward with complaints about alleged unfair treatment relating to issues such as tax audits and delayed tax refunds.

Mr Noroozi has also told AM he's identified the controversial Project Wickenby as an area for potential scrutiny after complaints that the ATO's pursuit of high wealth individuals is heavy- handed.

"I guess you could compare (the ATO) it to Telecom before it was merged with OTC and Aussat. The Australian Taxation Office is a monopoly by necessity, by and large they do a very good job. But by the same token, any organisation of that size that is a monopoly provider requires a certain degree of scrutiny and proper governance procedures," Mr Noroozi said.

"I want taxpayers to come forward and share their concerns with the way the tax office has dealt with them or their interactions with them so that I can have a better idea what the systemic issues are."

Mr Noroozi has identified a range of issues to be scrutinised such as the way tax audit targets are selected, delays in tax refunds, the administration of penalties and questionable "U-turns" on decisions.

But Noroozi stopped short of accusing the Tax Office of abusing its sustantial power over most aspects of life in Australia.

"I don't know whether abuse is the right word but certainly all the areas that I've reviewed have obviously been areas where taxpayers have cited that they've had issues and I have established that there is a systemic issue to be investigated. There's a whole range of reviews that we have done," Mr Noroozi said.

He agreed however that complaints about strong-armed tactics had been examined in the past.

"We see some very good examples of how the tax office has conducted itself and the way its dealt with the taxpayers, but we also see some ordinary ones and we also see some not so good ones. So yes we do see the range."

Mr Noroozi has extensive powers to monitor the ATO's activities including unrestricted access to the agency's internal systems, records and personnel.

While the ATO has implemented and agreed to many of Mr Noroozi's recommendations, it is clearly a sensitive relationship.

"It's not necessarily an easy relationship. My job is to only look at the problems. So obviously I'm constantly pointing out things that at least in my view are not working well," Mr Noroozi said.

"So of course that does not make an easy relationship."

That's an understatement that some Australian businesses and households might agree with.
Listen to an extended version of my interview with Ali Noroozi here.

Visit the Inspector-General of Taxation website.

Twitter: @peter_f_ryan

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