The days of the July handout of printed group certificates could be over after the Australian Tax Office received $189 million to push ahead with its single-touch payroll agenda.
The government announced the funding for the project in its mid-year economic and fiscal outlook (MYEFO) today.
The effort aims to give employers the ability to automatically exchange payroll information and superannuation payments with the tax man via their own accounting software.
The information will then be pre-populated into individual’s electronic tax returns via the ATO database.
Former Tax Office CIO Jane King in August said the agency wants to one day offer taxpayers a no-touch return for simple tax affairs, where forms will be entirely pre-populated and individuals will just have to give their “tick and flick” approval to submit.
The government expects the new, streamlined approach to filling out tax returns will boost tax revenues by $267.4 million over the forward estimates through improved compliance.
The ATO has been consulting with employers about what they want from automated, real-time tax reporting since July.
It said industry was generally supportive of the policy but warned that most businesses would require 12 to 18 months to make the necessary IT changes, and that in some circumstances the approach would actually increase the reporting burden through more frequent interaction with the ATO.
In response to the feedback, the government has pushed back its original hard start date from July 2016 to July 2018.
The ATO plans to roll out the new capabilities incrementally over the coming years, starting with a voluntary pilot of single-touch payroll in January 2017.
By tax-time 2018, however, the government will get pushier, with all organisations of 20 or more employees required to use the automated interface by July 1 2018.
To ease the transition, the ATO is offering small businesses a $100 tax offset to pay for standard business reporting enabled software in 2017-18 and help them manage their accounts according to the government’s accounting standards.
The crusade against paper will also catch the tax file number declarations handed out to employees.
The $189 million funding boost will also enable the development of an electronic process for completing TFN declarations and super fund selection forms via myGov, or even an employer’s own HR systems.
