Published on the 22/09/2014 | Written by Beverley Head
Australian businesses are starting to tangle more seriously with the notion of standard business reporting, which in the future will allow more streamlined tax and compliance reporting…
Since the beginning of the new financial year the Australian Tax Office has received 648,677 electronic lodgments through its myTax service and 1,055,970 lodgments via the e-tax 2014 service between 1st July 2014 and 9th September 2014.
MyTax, available on tablets, smartphones and computers prepopulates the tax form with information from previous years and data already provided by an employer and bank. The ATO is expecting 1.4 million people to use the service this year.
The e-tax system meanwhile allows electronic lodgement for more complex tax returns.
Over time the ATO is hoping that a move to standard business reporting compliant systems will allow businesses to similarly streamline their tax affairs, such that business software automatically generates the data needed to meet business tax obligations.
SBR was initially focused on financial and payroll reporting, but since July it has been the default standard for superannuation reporting through SuperStream, and the tax office plans to replace its electronic lodgement service with SBR by 2016.
In a recent speech, ATO second commissioner Geoff Leeper explained that SBR technology can read the financial data in a business accounting system, pre-fill forms with the required information, while allowing the business or their adviser to check for accuracy; and then make the required data available to the ATO through a safe, secure online channel. “As the data used in reporting is more consistent and integrated with natural business processes, it can also improve compliance outcomes,” he said.
The potential benefits of this approach are significant – in 2012 the Productivity Commission estimated that business could save $500 million a year through more streamlined reporting, even if only 60 percent of organisations adopt the approach.
But there’s the rub for some software companies – SBR reporting is at this stage not mandated – which is forcing accounting software companies to build in SBR capability to their products with no guarantees that customers will want or use it.
Accounting software systems have already begun the journey to full SBR compliance, with many already having tax file number declaration, activity statements, and SBR compliant payroll. However they acknowledge that they would prefer to see use of SBR legislated to ensure that there is a market for their systems, or at least for the ATO to commit to reducing the audit burden on companies using SBR reporting, which would further encourage uptake.
