The ATO is changing the way we work. We want to give our taxpayers, staff and stakeholders the best possible experience with the tax and super systems.
A major driver of that transformation is acknowledgement of the growing community expectations around Government services being simpler, faster and easier to use. Digital services are fast evolving and are quickly becoming the preferred way to interact with government agencies.
In the 2015-16 Federal Budget the Government announced its intention to proceed with the ‘Reducing red tape measure – reform to the Australian Taxation Office’ . Part of this measure included the Digital by default initiative – a proposal that will progressively make the method of interacting with the ATO, in a digital manner, with support for those unable to transition.
In preparation for this initiative we want to work with all segments of the community, to better understand how long you may need to ensure a smooth transition to digital services, how well existing support services meet your needs, and any concerns you might have.
We know all segments of the community will have different needs and concerns, depending on their obligations and other circumstances. This paper is not the only opportunity to provide feedback. It is expected we will be consulting more directly around the proposed law change that underpins this initiative. This is, however, a valuable chance to consult around our intended approach and for you to give feedback about the best way to work with us to meet your needs.
Digital by default is not about changing your lodgment or payment requirements it is about the channel you use to interact with us. We want to make every effort to make this as easy as possible. Our success will be measured on how these changes meet community expectations.
Australian Bureau of Statistics data  shows the number of Australians with access to the internet is increasing and the most popular digital activities are paying bills or banking, social networking, entertainment and accessing government services.
Digital Transformation Office (DTO)  research found most people and businesses are comfortable with using digital services to interact with government.
Digital services can provide many benefits to you and the community and many of you have already realised the benefits through services we already have available.
We continue to work to improve these services and seek out opportunities to offer the quality, secure and client-focused digital services expected. The Governments digital service standard  establishes the criteria that all Australian government services must meet.
The Digital by default initiative is only one important element of how we intend to meet these standards and community expectations. It cannot and will not work in isolation and we understand there are improvements that need to be made with our services for Digital by default to be an effective initiative.
This paper invites your feedback on the Digital by default initiative and how we will support you in moving to digital services.
We will also be seeking your feedback using various methods, including phone or mail, to ensure we reach all members of the community who may be affected by this initiative.
Closing date for response: 15 January 2016
You can provide feedback:
By email to:
Attn: Enabling Digital by Default
Australian Taxation Office
PO Box 9977
CIVIC SQUARE ACT 2608
02 4725 7833
We also encourage you to raise any other relevant issues or specific concerns about the matters discussed in this paper.
All information (including name and address details) contained in responses will be made available to the public on the ATO website unless you indicate that you would like all or part of your response to remain in confidence.
Automatically generated confidentiality statements in emails do not suffice for this purpose. If you would like part of your response to remain in confidence then you should provide that information marked as such in a separate attachment.
Legal requirements, such as those imposed by the Freedom of Information Act 1982, may affect the confidentiality of your response.
The proposed changes under this initiative will give the Commissioner the discretion to determine the required method of sending and receiving information and payments to and from the ATO provided the service is available and reliable.
We will ensure we invest the time and resources required to improve our digital services in line with the digital service standard and community expectations.
Initially the proposed method of how we interact will be through digital services however the changes have been designed so that if community expectations change and future services offer more benefits, then the Commissioner will be able to specify their use.
What this means is that we will require most people to use our digital services to send and receive information and payments to and from the ATO. This would likely be the same way you may currently use private sector services.
If you have difficulty in moving to digital services we will provide tailored support and assistance to assist your transition, and for those unable to transition an exemption.
The proposed law change (draft legislation) will provide you more detail around the changes to which you will have the opportunity to provide further feedback on in due course.
The contemporary digital experience is hindered by inconsistencies in existing law. This means there are limitations to the services we offer and in part how we are able to personalise them to meet your needs.
The complexity of the tax and superannuation systems has over time seen the creation of multiple service delivery channels. The Digital by default initiative is aimed at both directly and indirectly improving services to the community and streamlining interactions with your natural systems.
It is expected through ongoing improvement of our services and more people interacting through digital services that we will be able to generating significant savings that can be invested in building future platforms.
I can engage with government and access coordinated government
information and services through a single and secure digital entry
My information and dealings are in one place. I know this profile helps me receive tailored services and saves me time.
I provide information to government once through my profile and government services are coordinated, to make it easy for me.
Managing my tax and super is simple as most of the information is provided by others, eg to pre-fill my return. The system is automated which minimises mistakes.
In Standard Business Reporting (SBR) enabled software and the business portal I can easily fulfil my tax and super obligations through integrated software/digital solutions and event based reporting, leaving me with more time to run my business.
I can access information and services in a way and at a time that suits me.
I can engage with government and access coordinated government information and services through a secure digital entry point. My information and dealings are in one place.
In Standard Business reporting (SBR) enabled software and the tax agent and BAS agent portals I can engage with government and link clients to my practice through a single and secure digital entry point.
I have full visibility of my client’s affairs and can easily fulfil my clients’ tax and super obligations using solutions that integrate with and enhance my workflow.
What do you think of the concept of ATO services being Digital by default?
Do you agree that a greater use of digital services will benefit all those who deal with us?
For individuals with simple tax affairs (wage and salary earners with bank interest, dividends and relatively straightforward deductions), we use pre fill data to substantially pre-prepare your tax return in myTax. Once prefill data is received we will send notification to advise myTax is available and accessible through myGov. Of course, you can use myTax to lodge your tax return earlier using your own data.
MyTax will be available for those with more complex tax affairs. The service is being extended to cater to you.
Using myGov, you can now go digital to manage your pay as you go instalment (PAYGI) obligations and lodge your activity statements. These services are available for all individuals including those in business – meaning that sole traders, for the first time, are able to interact with us through ATO Online.
Our aim is to make services available through standard business reporting (SBR) enabled software, the Business portal and myGov so that reporting and payment obligations are closely aligned to your primary business systems.
Just as we do for individuals, we will continue to focus on optimising our use of pre fill data and the enablement of real time data exchange. This will include simplifying reporting services through software, so that information we require is automatically and seamlessly transmitted directly to us.
We also recognise that we need to improve the way businesses access and use digital services. We are working at a whole of government level, and with industry and software representatives, to develop new options for ease of access. For instance, we are exploring the option for a business client to link their ABN to their myGov account in order to access digital business services through myGov.
We are also supporting work that is underway across government to provide a simple business registration process, and the establishment of a single business account – including a secure inbox facility to enable the receipt of digital government correspondence.
We are committed to providing better services that are integrated with practice management software, using standard business reporting (SBR) enabled software and the Tax agent and BAS agent portal, so that reporting and payment obligations become part of your natural system, in the same way that we aim to do this for business.
Importantly, you will also have full visibility of your client’s affairs, with your client’s consent, in a way that integrates with and enhances your workflow even if they have a myGov account.
In particular, we remain committed to implementing standard business reporting (SBR) enabled practice management software as a replacement for the current Electronic Lodgment Service (ELS), stressing in that process the value-add opportunities available for tax professionals.
Dealing with us and employers digitally means that you will spend less time dealing with paper forms and transactions. The ATO is aiming to provide digital services for all your obligations so that as the Digital by default and Super-Stream reforms are progressively completed, you can achieve greater efficiencies in all your processes to meet tax and superannuation requirements.
Are there other benefits we have not outlined that you see from us using digital services to interact with you?
There are several ways Digital by default could be implemented however the reality is that we cannot transition everything at once to digital services. We understand the digital experience is different for everyone and how and when you transition may depend on a number of factors.
We are working on expanding our digital services in line with the digital transformation agenda so you can begin to use digital services for all your obligations.
Completing the transition to digital services for those able to participate will be a gradual and progressive process.
How we take this journey needs to be carefully considered both for the community and the ATO.
Some of the options of how we may assist you to transition may be:
We acknowledge there are constraints to how we may deliver the changes under Digital by default however believe we can work closely with you to develop the right approach that will meet everyone’s needs.
What do you think is the best way to transition those who deal with us to digital services?
Do you currently interact with us over digital channels?
Are there circumstances where you would not go digital?
Would you incur any cost to go digital? If yes provide approximate cost ($) and a brief description.
We will tailor our support services to make the move to digital services as smooth as possible for you. The support services that will be available include but are not limited to:
will also work with the tax professional community, software
developers, intermediaries, other government agencies and community
groups to widen the support network and services available to you.
We understand that most people will be able to move to digital services without much difficulty. We also recognise there will be some people who may require additional support.
What support would best help you to go digital?
How confident are you that our support services currently available could help you go digital?
As a member of the tax professional community, a software developer, intermediary, government agency or community group, how do you think we can work together to support the community to transition to digital services?
As we evolve the tax and super systems we are committed to apply the right approach for the right time. This includes increasing voluntary compliance and making it easy for you to get things right and hard not to.
Currently we have in place existing frameworks that we use to deal with those who do not do the right things. In the Digital by default initiative there may be provisions to follow a similar framework after a period of time.
We understand that you will need adequate time to prepare and move to our digital services as well as the right support to assist you in moving to our digital services. After the appropriate amount of time is given there is consideration for penalties to apply if you are required to use digital services and have the ability to do so, however continue to deal in paper.
While the nature of the penalties is yet to be defined we would ensure, like under existing frameworks, you are provided reminders and warnings. We will continue to support and provide awareness of our digital services.
Do you think the consideration of penalties is appropriate where taxpayers do not lodge on time or through the required channel?
We recognise that not everyone will be able to move to digital services for a variety of reasons.
Previous consultation has highlighted common reasons people may find it difficult in moving to digital services. This includes:
If you can demonstrate that you cannot move to a digital service, you will be given an exemption.
Exemptions may be granted on a temporary or long term basis depending on your individual circumstances.
Generally, for exemptions to be given we will rely on you contacting us to let us know you cannot use digital services and the reasons why. Exemption decisions will be based on your individual circumstances and in most instances will be requested and actioned over the phone.
In certain circumstances and where warranted, the Commissioner may choose to give identified groups of the community exemptions, for example following a natural disaster.
If you are exempt from having to use our digital services alternative services such as phone or paper will still be available.
Do you think the approach to exemptions is balanced?
What factors do you think should be considered when providing an exemption?
Are there other ways we can assist those who are unable to move to digital services?
 When we discuss digital we mean any electronically enabled technology that supports the transmission of information and/or payments. This could include, but is not limited to, online and internet-enabled systems, connected 3rd party software and mobile device apps. Our use of the term digital is not confined to current technology and also applies to any future technologies.
 Budget 2015, Part 2: Expense measures, Treasury. ‘Reducing red tape – reforms to the Australian Taxation Office’ http://www.budget.gov.au/2015-16/content/bp2/html/bp2_expense-21.htm
 Australian Bureau of Statistics, 2014. 8146.0 – Household use of Information Technology, Australia, 2012-13. http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/8146.0Main%20Features12012-13?opendocument&tabname=Summary&prodno=8146.0&issue=2012-13&num=&view
 Sensis e-Business Report, https://www.sensis.com.au/about/our-reports/sensis-ebusiness-report1
 ‘Information’ is a broad term covering things such as income tax returns and activity statements, notices of assessment, and applications for private rulings.
 Tax professional services will be available as a support option if you choose; there is no obligation to use these services.