Australian Taxation Law: Powers, Concerns, and Reform of the ATO

This essay provides an overview of the Australian Taxation Office (ATO), its powers, and the controversies surrounding them. It begins by outlining the ATO's role in collecting taxes and administering the taxation system. The essay then delves into the extensive powers granted to the ATO, including the ability to audit businesses, investigate tax fraud, and seize assets. A key focus is on the concerns raised about these powers, particularly their impact on small businesses, including the ability of the ATO to divert business income and conduct searches without warrants. The essay discusses government interventions and calls for reform, such as the need for a shift in the burden of proof and increased oversight. It also explores the ATO's efforts to gain public confidence and the author's opinion on the need for a reduction in ATO's powers. The essay concludes by emphasizing the importance of the ATO's role while advocating for a more balanced approach to its powers to protect taxpayers' rights and promote fairness in the Australian taxation system.

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AUSTRALIAN TAXATION LAW
Name
Course
Instructor
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University

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Introduction
Australian Taxation Office (ATO) is a statutory body or agency vested with powers and
authority to collect taxes in the country of Australia. It has responsibilities of administering
superannuation legislation and governing the smooth running of all the federal revenue collection
or taxation system within Australia1. In the Australian government, it’s considered to be one of
the most strongest and powerful institutions. It has powers which are related to law enforcement
bodies and the police. Therefore, this organization was granted powers by the state to audit
running business both small and big within the country to detect tax fraud. It does not only have
such powers but also has a right to apprehend and offer hefty punishments to the convicted in
case when they fail to prove their innocence.
The agency also possesses powers to carry out a search of one's property minus issuing a
warrant. All these powers are offered by the legislature in order to fight tax fraud and evasion
within the country. One of the powers held by ATO that has left citizens perplexed and
unsatisfied is its ability to divert small business incomes to themselves through instructing the
banks holding small business accounts. This is usually conducted in case of failure of small
business to pay off their debts2.. There is need to reduce on the extra-ordinally powers granted to
this office, this would give small business operators relief. The Sydney Morning Herald reported
1 ADAM Zuchetti, ATO lambasted for abusing ‘unbridled power’, 09 April 2018.
https://www.mybusiness.com.au/management/4152-ato-lambasted-for-abusing-unbridled-power
2 Adele Ferguson, Lesley Robinson & Lucy Carter, ATO raids tax office whistleblower amid Fairfax-Four
Corners investigation.P.4. The Sydney Morning Herald, 4 April 2018.

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one of the culprits "Kathryn" who ran broke and her ability to pay bil3ls and feed herself was
snatched away by ATO. The office abruptly cancelled her ABN (Australian Business Number).
She is among the few to report but there are a lot of individuals out there whose businesses are
taken as surety or permanently confiscated without warning or any notice.
There is need to monitor the different services that are carried out by this office so as to offer
protection to the small businesses. Some of the powers granted to the office include issuing out
formal notices where business owners are required to "give responses to written questions,
basing on one's understanding and knowledge”, “give evidence through attending their
interviews as well as answering oral questions", "produce documents to their offices". These
powers granted to the office by "Federal Court" under "Administrative Decisions (Judicial
Review) Act 1997" have created more financially handicapped individuals thus rising a need for
power reduction. In case of failure to reduce on power of the ATO, the legislature should
formulate possible policies to ensure that small business owners are protected. This should be
carried out through different measures such as; ensuring that income diverts by the ATO should
only and only be conducted through thorough warning of the business owners, search should be
conducted in possession of a search warrant inorder to avoid tarnishing of business name
(character assassination). The Australian Tax office needs to revise its behaviors and actions
towards the less wealthy taxpayers. These actions involve application of unfair legal advantages
3 Annual Plan (PDF). Australian Taxation Office. p. 3. Archived from the original (PDF) on 17 October
2013

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and high level of power to the less privileged business individuals. It also consists of passing
inaccurate and unfair judgments towards these class of individuals4.
Discussion
Powers of an Australian Taxation Office
The Australian tax office is rated to be among the most powerful bodies in Australia. The office
has surprising powers almost equivalent to the police and the law implementation agencies. For
any mistakes that are made by the institution, small businesses and livelihoods can be easily
destroyed.
Unlike with the how where a victim remains innocent until proved guilty, with the tax office
once one is accused of fraud, it is the responsibility of the accused to prove themselves innocent.
For long, the tax office has been accused of taking up all the power that is to say; as a detective,
prosecutor, evaluator, jury and the economic hangman. The tax office has powers to take seize
assets of one with a debt even before they are given the opportunity to prove their innocence.
The Australian tax office has the powers to search one’s property without a warrant. The office
has strong powers given by the legislature to fight evasion and fraud of taxes. They therefore
have the power to access property and to also search documents forcibly without any warrant.
The tax office has the power to divert the incomes of small businesses to itself in case of any
debt5.
4 Biggs, Amanda "A short history of increases to the Medicare levy". P.9.Parliament of Australia.3 May
2013.
5 Conder, Chuck"Arizona sheriff under investigation for alleged abuse of power". CNN. July 10, 2010.

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Government interventions
The parliamentary committee called for the onus of proof to be reserved three years ago after
noticing abuses of power; for insistence cowboy auditors compelling action against companies
without critical proof.
The Australian government pledged to investigate the taxation body upon receiving information
from credible sources. Information obtained by the Government revealed that the tax agency
targeted individuals and small businesses as a source of funds to meet the target of the budget.
Following the insistences reported by Australian Broadcasting Corp and Fairfax Media Ltd on
misuse of power by the taxation body and allegations of unethical means of collecting revenue,
the ministers demanded for comprehensive investigation of all the matters raised. This action
followed the claims that Boyle and other colleagues of the tax office were ordered by their
superiors to grab funds of individuals found to owe money, from their accounts irrespective of
their conditions.
The high court has the power and also other courts to overrule the decisions of the tax office,
however, the legal procedure to action is very expensive and cannot be afforded by many of the
small businesses. The high court therefore works as a watchdog over the taxation office. The
Australian Tax Office is made accountable of its actions under the Federal Parliament and is
brought before the estimates of the Senate and parliamentary queries. The office is also subjected
to be reviewed by Commonwealth Ombudsman and the Office of the National Audit6
6 Edmonds, Leigh "The 1910s: Laying the Foundations". A brief history of the Australian Taxation
Office(PDF). Australian Taxation Office. pp. 5–22.2010.

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Much as the Inspector General of Taxation watches over the Australian Tax Office, he has a
limited workforce; he only has thirty members of the staff to oversee a workforce of twenty
thousand people in the tax office. Additionally, the decisions of the general are not much binding
like for the other overseers in other jurisdictions7
Step taken by Australian Taxation Office to gain public’s confidence
The taxation office has continued to publicize the relevance of paying tax and the ways through
which this money is spent to benefit the tax payers. This transparence is aimed to rebuild the
confidence among the payers and also to encourage them to pay in time to avoid undesired
outcomes.8 They also accept the information given to them at first instance and adhere to the law
and a take a period to review reports and returns of the victim.
Opinion concerning ATO
According to me, I think that the ATO has many powers in how they are performing their
activities and I suggest that it should be diluted.
In this case, I believe that the Australian Tax Office has been given much power of entering into
the businesses of citizens. On this note, the power of the ATO should be reduced because it is
7 Medicare levy". Australian Taxation Office. Archived from the original on. From 1 July 2014 the Medicare levy
rose from 1.5% to 2.0%.10 July 2014
8 Paul Smith "Online piracy fuelled by 'Australia Tax' price gouging". Australian Financial Review. Fairfax
Media Publications 29 July 2014.

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beyond its limit when compared to other agencies such as law enforcement groups and police9.
Ina addition, ATO is making a big mistake of destroying the livelihood and business of people. I
consider that ATO to be more concerned about making money but fails to consider the people it
is working with10. Through the position of much power, people's right is violated in such a way
that they are knocked during the time of paying taxes. I believe the tax office has reached an
extra possession of power because citizen can’t be treated in such a matter. As a result of much
possession of powers by the ATO office, very many people will tend to evade tax due to the
behavior of the Australian Tax office. In addition, the Australian tax office should not have the
power to seize individual possession in case he or she is not proved guilty.
I consider the actions of the Australian Tax office to be abusive because they don't violate an
individual opinion but rather use their own forces to make a decision11. To note, the ATO is
supposed to first have permission to carry out a survey on some one's property but not forcefully
perform its operations without taking someone's property without the notice of the police
9 "Income Tax Act (2 Edw VII, No 10)". Queensland Historical Acts. Australasian Legal Information
Institute. Retrieved 22 March 2014.
10 "Low income earners". Australian Taxation Office. 23 May 2016. The offset can only reduce the amount
of tax you pay to zero and it does not reduce your Medicare levy.
11 Peter Ryan, ATO facing investigation over garnishee orders which let tax collectors grab money from your
bank account, ABC NEWS,16 May 2018.

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officers. In summary, the Australian Tax office power should be reduced in order to have a better
nation because it is misusing power for its own benefits12.
Conclusion
In conclusion, it is the duty of the ATO to collect to collect all the taxes across Australia. In
addition, the body is responsible for making sure that all the tax revenue activities are performed
effectively. Despite the alleged miss use of power by the most businessmen and Citizens of
Australia, the body still operates its services as required. Therefore, people's complaints about
ATO issuing warrants should be appealed to the legislature in case they want justice of their
concerns. Therefore, the above allegations brought forward by various whistleblowers like the
media houses and general public about the current misuse of power calls for a high level of
investigation and action from Government and other law agencies.
12 Paulina Duran, Australia to investigate tax body over abuse-of-power allegations, BUSINESS NEWS,
APRIL 10, 2018.

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Bibliography
ADAM Zuchetti, ATO lambasted for abusing ‘unbridled power’, 09 April 2018.
https://www.mybusiness.com.au/management/4152-ato-lambasted-for-abusing-unbridled-power
Adele Ferguson, Lesley Robinson & Lucy Carter, ATO raids tax office whistleblower
amid Fairfax-Four Corners investigation.P.4. The Sydney Morning Herald, 4 April 2018.
Annual Plan (PDF). Australian Taxation Office. p. 3. Archived from the
original (PDF) on 17 October 2013
Biggs, Amanda "A short history of increases to the Medicare levy". P.9.Parliament of
Australia.3 May 2013.
Conder, Chuck"Arizona sheriff under investigation for alleged abuse of power". CNN.
July 10, 2010.
Edmonds, Leigh "The 1910s: Laying the Foundations". A brief history of the Australian
Taxation Office(PDF). Australian Taxation Office. pp. 5–22.2010.
"Income Tax Act (2 Edw VII, No 10)". Queensland Historical Acts. Australasian Legal
Information Institute. Retrieved 22 March 2014.
"Low income earners". Australian Taxation Office. 23 May 2016. The offset can only
reduce the amount of tax you pay to zero and it does not reduce your Medicare levy.
Medicare levy". Australian Taxation Office. Archived from the original on. From 1 July
2014 the Medicare levy rose from 1.5% to 2.0%.10 July 2014
Paulina Duran, Australia to investigate tax body over abuse-of-power allegations,
BUSINESS NEWS, APRIL 10, 2018.

10
Peter Ryan, ATO facing investigation over garnishee orders which let tax collectors grab
money from your bank account, ABC NEWS,16 May 2018.
Paul Smith "Online piracy fuelled by 'Australia Tax' price gouging". Australian Financial
Review. Fairfax Media Publications 29 July 2014.