Accountants are likely to bear the brunt of a $500 million red-tape reduction initiative as the tax office streamlines its procedures, according to ATO second commissioner Geoff Leeper.
Speaking at the Accountants Technology Showcase Australia in Melbourne last week, Mr Leeper warned accountants to move away from offering tax compliance services and concentrate on offering their clients business advice as technological advancements streamline compliance processes.
Mr Leeper said the ATO’s Standard Business Reporting (SBR) technology will mean a loss of processing and compliance work for many accounting firms. This potential loss of work means accountants must adapt their offering to remain relevant, he said.
“I always say, even inside government, when you present financial data to me I want the conversation to be about what the data means, not ‘is the data right?’ We’ve got to get over ‘is the data right’ and have a conversation about what the data means.”
Mr Leeper said SBR is one part of a deliberate attempt by the ATO to reduce red tap in the nation’s tax system.
“We are being told by government to deregulate and cut red tape – and form filling and rekeying of data are classic examples of costs that shouldn’t be borne by the economy – that’s why we are pushing on this stuff.”
“The red-tape reduction savings from SBR, which is a priority for the government, total probably $500 million in the economy. A lot of that will come from professional fees. To resist that is to resist microeconomic reform and economic efficiency and productivity growth. It’s not always comfortable when the bus comes to your door for the change but at the moment this is one place where the bus is coming,” Mr Leeper said.
The tax office is developing a standard chart of accounts that if used could possibly simplify corporate compliance to the extent that businesses can submit their own tax returns, without the need for an intermediary, according to Mr Leeper.
“We are working with the industry at the present time to build something we are calling a standard chart of accounts for firms with relatively simple tax affairs – it echoes what we have done for individuals – and if this standard chart of accounts software is used we are saying two things to a business: one, is that it is going to be automatic that you make your tax returns and two, provided your company accounts properly reflect what your business does, that is there is no cash draw or anything dodgy like that, we promise not to audit you because we trust the information so implicitly,” Mr Leeper said.
- What does 2021 have in store for ATO audit activity? - 26 November 2020
- Over 30,000 people have invested in crowd sourced funding equity raising - 13 August 2019
- The 7 things your SMSF clients are judging you on - 13 June 2019