‘stop the ATO abuse of small business’

Business Spectator, Robert Gottliebsen, October 22, 2018 (EXTRACT)

Both political parties have now officially recognised that the Australian Taxation Office has been unfairly abusing small and medium-sized business. The judiciary has declared that the abuses stem from the fact that too many ATO officers in the middle ranks believe that small entrepreneurs are crooks so deserved to be abused.

The ALP has responded to the abuse with a policy that will create a second commissioner to deal with small business tax appeals. It will work for a few years but the bad culture in the ATO means that it is a temporary fix.

To its credit the Coalition also responded with a binding promise that it would establish an independent body to stop the ATO abuse of small business. But then the internal Coalition chaos took over and there was silence. At this stage the ALP is firmly the party of small business, but once again the opportunity is there for Morrison and Frydenberg to honour the Coalition promise and set up a truly independent small business tax appeal body responsible to the attorney-general’s department and, even better, make all tax prosecutions stem from the attorney-general’s department.

But the chaos in the Coalition runs deep. While the Coalition is confirming that the ATO is abusing small business another arm has prepared draft legislation that requires all directors to be registered. That’s perfectly OK but the draft legislation has given the small business-abusing ATO power to administer and decide who can be directors. They will rub out directors in the same indiscriminate way they have been preventing legitimate businesses operate by removing their ABN numbers.

So, under this draft legislation, directors can be removed and no doubt many in the ATO will conclude that all directors are crooks –the same as small business.

Words fail me. Why on the one hand would you recognise ATO abuses and on the other give that ATO draconian new powers? The register should be run by ASIC.

The Coalition needs a time in opposition to work out what it stands for.

But if Chris Bowen does not admit error and the Coalition stops the ATO small business abuse then it’s conceivable that the Coalition will stay in power. (That’s not a prediction).