Mr Jordan, who became tax commissioner in 2013, with a pledge to reinvent the ATO, said his mission was to “build trust and confidence in different generations and in new Australians so that they view paying the right amount of tax and meeting super obligations as the norm”.
“Now it is time to focus on winning hearts and minds, the key to willing participation – trust and confidence in the ATO and the tax and super systems more broadly,” he said.
Mr Jordan also addressed comments by renowned tax lawyer Mark Leibler made a day earlier at the same conference. Mr Leibler has described the ATO’s powers as “draconian” and talked of the need for checks and balances to counter the potential for these powers to be misused.
“What struck me was the perception some people may hold that the economy can hinge on my job and the role of the ATO,” Mr Jordan said. “Taking money from people and businesses is not always welcomed, and at times we have to be very firm and resolute in our actions so the majority knows we are acting in their interests to ensure everyone is paying the right amount.”
Australia’s tax system was not corrupt, but he realised that “just being free of corruption is not enough”.
The public also needed to believe that the “ATO is fair in our decisions and actions, that we are sensible, ethical and empathetic, and that we support the majority of those willing to do the right thing and take firm action with those who play games or do the wrong thing”. “When I finish up as commissioner in 2024, I intend to hand over the baton and be able to say ‘the experience with tax and super is better’.”
Focus on big companies
Mr Jordan also spoke of the ATO’s ongoing focus on big companies. He said the Tax Avoidance Taskforce had raised $5.2 billion in liabilities against public groups and multinationals. The Multinational Anti-Avoidance Law (MAAL) was also having an impact, with 38 multinationals having brought, or in the process of bringing, about $7 billion of additional income a year to the Australian tax base.
And because of MAAL, $290 million of additional GST was paid in 2016-17 by taxpayers who had restructured to recognise an Australian taxable presence. He said an extra $206 million in GST has already been collected in 2017-18.
The Chevron tax case had seen some taxpayers with cross-border-related party financing arrangements talk to the ATO in relation to some $80 billion of related-party loans, resulting in a reduction of about $1.4 billion in interest deductions in the 2018 year alone.
In relation to the black economy, or cash economy, the ATO had visited more than 2600 businesses across eight locations last year. In the first six months of 2017-18, the agency conducted 5020 reviews and audits, resulting in about $143 million in tax and penalties.
Mr Jordan also addressed the IT outages that plagued the ATO for much of 2016, angering tax professionals, some of whom are demanding compensation from the ATO.
He said since September, the ATO had visited more than 600 tax agents for their feedback on how systems were working.
Do you know more? Email Nassim Khadem
Deputy Editor, BusinessDay. Reporting on tax and regulation.
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