Tax transactions in technology’s fast lane

Tax transactions in technology’s fast lane

The move from lodging on paper to the technology-driven Australian Business Register program is saving an estimated $1.2 billion for the 2015-16 financial year, according to a recent study by accounting firm Deloitte.

Commissioned by the ATO, the research study notes that the savings in the five years leading up to the 2017-18 financial year is estimated at $4.5 billion.

The Deloitte research is the most current piece of research that quantifies the benefits of moving to the new lodging platform.

Accountants and their small business clients have heard much about the efficiencies and savings from electronic lodging via Standard Business Reporting will bring since its inception. The government and various professional and industry organisations have urged business advisers and business owners to shift to electronic lodgement based on the costs that it would save.

Only in recent times has research emerged that demonstrates the gains that have arisen from the cultural shift in how practitioners approach lodgement with government bodies.

Deloitte says that the bulk of savings in relation to the transition from paper to electronic — about 89% — has gone to the business sector, with only about 11% being recouped by government. It says that there is a saving of $65.45 per hour that applies.

The Deloitte report was released in March of this year, but the savings reflected in the report are consistent with observations made by the Commissioner of Taxation, Chris Jordan, in the annual report of the Australian Business Registrar for 2014-15 (Jordan also holds the role of registrar).

This annual report states that businesses are getting the advantage of a new streamlined system for regulatory lodgement. “With the benefit of changes made to the ABR system in 2014, start-up businesses are finding it faster and easier to register and obtain an ABN, enabling them to get on with business immediately,” Jordan said. “In this period, 100,000 extra start-up businesses succeeded in getting their ABN on the spot.”

Speed is the hallmark of the new system, and the ABR report says that the reduction in financial affects associated with delays in issuing ABNs was substantial. Business saved $30.6 million overall and government saved $17.2 million when compared with the costs in 2012-13.

A part of the digital regime is having authentication of AUSkey, which enables public officers and company officeholders to access the ATO portal securely. At the time of that annual report, AUSkey authentication was supported by 27 government agencies. These agencies collectively offer 55 online services to taxpayers.

“There were just under 620,000 businesses with an AUSkey as at 30 June 2015, a 24% increase on the previous year, while the number of authentications in 2014-15 increased by 41% to 62.7 million,” Jordan noted.

The electronic environment also requires the likes of the Tax Commissioner to ensure there is some cleaning up done of ABNs. Some of your clients may have found themselves with an active ABN but they were no longer running a business.

This is why. The registrar conducted a major program of getting rid of ABNs that were no longer valid or required. “This involved removing 1.2 million redundant ABNs and updating a large number of records. Another key area of improvement was the industry (ANZSIC) codes, which resulted in a 47% improvement on last year,” the annual report of the registrar said.

“This work is making the register a more valuable and usable resource for the community as a whole. For example, a Queensland department is looking to use the register ‘as a single source of truth’ by integrating it with its customer relationship management system.”

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