Budget 2013: ATO given $77.8 million boost to increase focus on data matching

The Australian Taxation Office has received a $77.8 million boost in tonight’s budget, with the government hoping to recover $610 million over the next four years through improving its data-matching practices.

The move was largely expected by the tax industry. The ATO’s effort in data-matching to track down unpaid funds has proven lucrative for the cash-strapped government.

The ATO has also received additional funds in order to investigate tax compliance among trusts.

The budget has allocated $77.8 million over the next four years to improve compliance, and to boost its data matching capabilities with third-party information.

The government expects the funding will provide $610.2 million in revenue over the next four years. No revenue is expected in the 2013-14 budget, with the first batch of revenue, ($115.1 million), to come in 2014-15.

The ATO’s data-matching efforts come as part of a renewed push into technology as a means of recovering lost funds, alongside similar efforts such as the Wickenby investigations.

Data-matching involves tracking down records of certain sales, investments or transactions in order to calculate the amount of tax owed.

In the past year the ATO has used data-matching in a range of different investigations, including looking into sales of third-party sales of luxury boats in order to track down certain taxpayers who may have been subject to higher taxes.

The ATO has also used data-matching for smaller initiatives – such as calculating basic data for individuals like interest owed on a savings account.

“The information provided to the ATO will also improve the pre-filling of tax returns, making tax time simpler for taxpayers,” the government said in the budget papers.

The budget also said the money would be used to strengthen reporting systems for:

• Taxable government grants and other government payments
• Sales of real property, shares and managed funds
• Sales through merchant debit and credit services
• Managed investment trust and partnership distributions, company dividend and interest payments
• Transactions reported to the ATO by the Australian Transaction Reports and Analysis Centre.