As outlined in the Federal Budget 2023, The Australian Taxation Office (ATO) will be given an additional $588.8 million over 4 years from 1 July 2023 to continue to undertake activities that promote GST compliance.
Specifically, the aim of the increased ATO activities is to ensure that businesses meet their GST compliance obligations, including accurately accounting for and remitting GST, and correctly claiming GST refunds. It is understood that part of the funding to be provided will also be used by the ATO to develop more sophisticated analytical tools to deal with emerging risks to the GST system.
The Federal Government estimates that over the 5 years from 2022–23 to 2026-27, ATO activities will lead to an increase in GST receipts by $3.8 billion, and other tax receipts by an additional $3.8 billion.
Businesses should prepare for increased ATO GST compliance activities by:
Relevantly, the ATO has previously released detailed guidance on how to conduct a review of an entity’s GST control framework. This guidance also explains how to undertake data and transaction testing to ensure business systems are creating, capturing, and correctly reporting GST.
Should any GST reporting error and/or GST shortfall be identified as part of the preparation undertaken for any ATO GST compliance activity, it is recommended that this be included in a written voluntary disclosure to the ATO (ideally prior to the commencement of any ATO GST compliance activity). Any voluntary disclosure should also disclose any action taken to prevent or avoid further errors from arising in the future.
Check out the full coverage from the Federal Budget 2023 here.
The views and opinions expressed in this article are those of the author/s and do not necessarily reflect the thought or position of Crowe Australasia.