Australia To Have Tax System Advisory Board

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

06 August 2010

Nick Sherry, Assistant Treasurer in the Labor government, has announced that, if re-elected, the government will reshape the governance of Australia’s taxation system and establish an advisory board at the Australian Taxation Office (ATO).

The Tax System Advisory Board (TSAB), as it will be known, will inform the Tax Commissioner and ATO Executive Committee on the strategy, direction, organisation, management, compliance planning, staff profile and information technology plans at the ATO. It will also to provide a new, direct and in-built voice for the business and taxpayer communities in relation to ATO decision-making and culture.

The Tax System Advisory Board, which will be similar to a strategic private-sector style board, will be made up of non-government members and will begin with a review of the ATO’s management practices to ensure the highest level of corporate governance.

Sherry pointed out the recent Henry review found that the governance of Australia’s tax system is fundamentally sound and there is general confidence in it. However, the review also identified ways to further increase the responsiveness, accountability and transparency of how the tax system is administered.

He said that TSABs already exist in the United Kingdom, the United States and Canada, and establishing such a board was the key governance reform recommended in the review. A detailed consultation with the tax community on the TSAB will occur within 2010.

At the same time, he confirmed that the Tax Commissioner would remain the independent head of the ATO with responsibility to undertake the administration of aspects of Australia’s tax system and deliver the ATO’s commitments to government and manage the ATO as a government agency.

A re-elected Labor government will also recommit, he added, to a principles-based approach to tax design to deliver a simple, transparent, responsive, accountable and accessible tax system, including continuing work to deliver Australia a single modern Income Tax Assessment Act.

Sherry said that the Board of Taxation has grown to become a well-respected part of Australia’s tax system, particularly by the business community. It provides both a business and broader community perspective that helps to improve the design of taxation laws and their operation. The Board has also shown itself to be capable of providing advice to improve the integrity and functioning of the taxation system.

A re-elected Labor government would therefore boost and reshape the role of the Board of Taxation by empowering it, in consultation with the government, to initiate its own reviews to examine how current tax policies and laws are operating.

The government’s reform agenda to date has included the establishing of a permanent Tax Design Advisory Panel made up of private sector advisers to assist with the design of new tax measures; and of a Tax Issues Entry System for the public to directly raise issues relating to the care and maintenance of the Australian tax and superannuation systems.

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