A former assistant tax commissioner has warned that the Australian Taxation Office is facing a crisis on a number of fronts but is not confronting the problems.
Writing in The Public Sector Informant today, former ATO assistant commissioner John Passant has warned that the Office lacked strategic thinkers, wasn't facing up to international tax issues and its ageing staff meant it sat on a demographic time-bomb.
Mr Passant, who retired in June, criticised the impact of the extra efficiency dividend imposed by the Government in this year's budget and said it was a false economy. ''For the ATO leadership, work-life balance is all well and good until life balance gets in the way of work and outputs.
''No wonder the ATO's Comcare costs skyrocketed in the last decade,'' he said.
''The commissioner [Michael D'Ascenzo] himself highlighted, in my opinion, the stupidity of the 'efficiency' dividend in Senate Estimates recently.
''His words were to the effect that any loss of ATO funding would result in a loss of revenue 10 times greater.''
Mr Passant said attracting quality staff was becoming more and more difficult.
''The ATO remuneration levels are trapped within public service boundaries. For sought-after graduates, the pay is a pittance compared to accounting and law firms.''
The Tax Office was also failing to face up to the problem that a large group of employees would soon be retiring.
''There are a large number of ATO officers in the 50- to 54-year-old age bracket. If they were to leave, the ATO would lose experience and expertise on a grand scale.''
Mr Passant said Australia was now closely integrated into the world economy, but ATO thinking had not kept up.
''The tax system, especially the international tax system, had to change as a consequence. The ATO and its thinking about international tax is lagging far behind these developments and has to change.''
A ''detail fetish'' was also blighting the organisation.
''Now, this is no bad thing in areas administering complex law,'' Mr Passant said. ''But when it pervades an organisation to the exclusion of vision and strategic thinking [as it does in the ATO] then the organisation is in trouble, at least in the long term.''
A Tax Office spokeswoman said Mr Passant's criticism was ''wide of the mark''.
The ATO had, ''significantly ramped up our work on international issues such as tax havens, transfer pricing, global corporate restructures and cross-border financing.
''We have a specialist legal area for international issues, we're taking a more systematic view of risks by industry rather than individual cases, and we're working more closely with other Australian and international agencies.''
The Office's work on international issues was ''delivering positive results'' and included Operation Wickenby, which targeted offshore tax havens.
''To date, Wickenby has raised $157million in liabilities, collected over $70million and restrained about $72million from the proceeds of criminal activity.'' Also, workforce issues were being addressed.