BackThe review into aspects of the Pay As You Go (PAYG) instalments system is the first Inspector-General of Taxation (IGT) review to be undertaken in direct response to insights drawn from the IGT’s complaint handling service. A key focus of this review was individual taxpayers’ awareness and understanding of the PAYG instalments system.
The ‘Pay As You Go’ (PAYG) system aims to assist taxpayers meet their anticipated tax liabilities by minimising large end-of-year tax bills and provide Government with revenue during the income year. Individual taxpayers were unclear as to why they had been entered into the system, its requirements and exemptions, its interaction with the annual income tax system and the support tools available to them. Accordingly, the IGT has recommended a number of improvements to the Australian Taxation Office's (ATO) taxpayer communication and guidance materials as well as internal staff education and support.
The major underlying sources of stakeholders’ concerns arose from confusion caused by the interaction between the ATO’s accounting systems, the ATO's entry criteria for individuals, administration of penalties and interest.
Overall, the IGT has made seven recommendations. The ATO has agreed in full with six recommendations and has partly agreed with the other. The one part on which agreement was not reached relates to the provision of a general information brochure to new entrants into the system when issuing the ATO welcome letter. However, the ATO has committed to considering alternatives.
The implementation of the agreed recommendations should result in significant improvements for individual PAYG instalment taxpayers, their representatives and the ATO. The IGT wishes to take this opportunity to thank all who contributed to the success of this review.
For the full report, see below or on the website of the IGT.
Source: Inspector-General of Taxation
