$9 billion returns refunded as ATO irons out Change Program wrinkles

1 million tax returns processed per week as tax office ramps up $750 million system

The Australian Tax Office (ATO) has claimed success in finalising 3.8 million tax returns in the eight weeks since the end of the 2009/2010 financial year, with $9 billion issued in total so far.

According to an update released by the ATO, the government organisation has so far received 4.7 million returns, with one million processed in the last week.

However, the ATO is yet to meet its target of issuing refunds to 94 per cent of taxpayers within 14 days. The office has, to date, issued 77 per cent of tax refunds within the two weeks, with 99 per cent of all refunds returned within a month.

Delays in processing lodgements involving HECS-HELP and Centrelink claims have reportedly slowed the process, with no explanation as yet whether the delays will be reduced in the near future.

“If they’re lodged electronically, there’s various automated checks placed on them, so many returns go straight through the system, but there are some returns that will take more time,” ATO Second Commissioner, David Butler, said in the update. According the office, returns that required confirmation with other government departments could extend processing time by up to three days.

Other causes for delay included multiple cases of using the wrong bank account details.

“We’ve had for example a week or so ago 6000 cases where people had put the wrong bank account details in their returns. Of course that could be an invalid bank account, an old one, and that could cause a delay.”

However, the ATO has moved to cool concerns.

“We apologise if you have not received your refund within our service standards, however there are no significant technical errors with the system causing delays,” an update from the office reads. “It is a brand new system and we are still smoothing out some of our processes.”

The “brand new” system is the result of a six-year change program initiated in 2004 to transition the government department from 180 legacy systems to a single, integrated platform. The program was expected to be finalised this year, with the Federal Government failing to allocate further funding for the changes in this year’s Federal budget, but a blowout of costs to $750 million ignited fears of further funding required to complete it.

“When work began in 2004 [we] weren’t able to anticipate what would happen every year -- the increase in time and scope as the result of law changes,” Butler told a Senate hearing in April. “The law has changed. Superannuation changes added time and cost to the overall work.

“We are starting from the proposition that IT system is quite a significant achievement… the project has delivered systems that most tax offices can only aspire to. The [new] system is more flexible and agile to incorporate new changes to legislation.”

Further changes are possible too, with the Cooper review into superannuation recommending a revamped superannuation reporting and management platform based on the Standard Business Reporting scheme released this year.

The office has claimed that its electronic lodgement application, e-tax, has seen an increase in use of five per cent over last year, despite the software remaining Windows-only, with no options provided for Linux or Mac users.

More than $65 million in fraudulent or over-claimed refunds have also been stopped, equal to 15,000 returns. Butler said the office expected to resolve 93 per cent of those cases, but that $20 million of that money could be linked to serious criminal activity.

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