ATO Faces Audit Over Bogus Investment Schemes Debacle

by Mary Swire, Tax-News.com, Hong Kong

18 February 2002

According to the Australian National Audit Office (ANAO), a thorough audit of the ATO's anti-tax avoidance measures has been scheduled for August of this year, despite the tax office's settlement offer, announced on Thursday.

Tax Commissioner Michael Carmody last week unveiled plans to halve the tax bills of thousands of investors duped by bogus tax minimisation investment schemes, in return for which, investors would be required to give up the right to appeal.

However, the Australian Taxation Office itself stands accused of taking too long to disallow the $4.5 billion in tax deductions which resulted from the schemes, which delay meant that many investors were hit with massive unpaid tax bills, accrued over several years.

Peter White, the ANAO's Executive Director of Performance Audit told the Australian Associated Press last week that the audit would not just be focussed on the particular cases in question: 'It's not going to be on mass-marketed schemes, we are going to examine the ATO's management of aggressive tax planning,' he explained.

The Senate Economics References Committee also announced last week that it had completed its final report on the tax office's handling of the schemes. The report recommended tougher powers to shut down scheme promoters, and better taxpayer education regarding their obligations under self-assessment.

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