The huge amount of data we receive from taxpayers and third parties, collected traditionally for compliance purposes, is increasingly being used to make things easier, reduce the compliance burden and tailor our interactions with clients.
Pre-filling of myTax returns with information from organisations (such as employers and banks) continues to be extended, making it faster and easier to lodge a return. Our expanded data-matching program provided additional pre-fill data to around 1.5 million taxpayers in 2015–16.
Beyond this, data analytics enables the ATO to differentiate between taxpayers and engage with them in a more personalised way that reflects their tax history – for example, by sending a reminder text message to people who have a tendency to lodge their returns or pay their tax late.
Similarly, when taxpayers use our automated system to set up a payment plan for outstanding tax debt, sophisticated analytics and risk-rating processes ensure the options available to them are tailored to their circumstances.
Another initiative being implemented to support taxpayers for Tax Time 2016 is online messaging. The messaging will alert taxpayers while they are completing their online tax returns if their work-related expense claims are outside normal patterns and likely to bring about a query from the ATO.
Services such as these are co-designed with the community under the Reinventing the ATO program. Prototypes are then tested with taxpayers, in our collaboration centres and also through the ATO Beta website, which enables online products to be trialled in a live environment before being released for general use.
Increasingly, data analytics is both service and compliance driven – this is particularly relevant in new sharing economy sectors where the distinction between private and business activities is not always clear-cut for participants. For example, data received from merchant payment services and sharing economy platforms can be used to identify potential business operators, not only to test compliance after the event, but to engage with them early so they know what to do from the start.
Smarter ways of using our data are also improving back-office processes in ways that directly improve service to taxpayers, by speeding up error corrections and tax return processing.
Cutting red tape by questioning what we do
Over the 2015 calendar year, by changing our processes, the ATO further reduced the cost of red tape for individuals and businesses by $297.7 million. This brings the ATO's contribution to savings under the government's regulatory reform agenda over the last two calendar years to $615.5 million.
We have cut red tape by listening to the community and focusing on the client experience. For example, some taxpayers have benefited from more streamlined processes for preparing and completing tax forms, simplified record-keeping requirements and easier access to information.
Cutting red tape is not just about reducing the regulatory burden on our clients, but also about streamlining internal processes (see Internal processes for more information).