26 September 2023

Auditor finds more tax could be collected better

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Victoria’s Auditor-General has found that the State Revenue Office (SRO) which collects the Government’s taxes could collect more tax if it improved the way it collected it.

In his report Collecting State-based Tax Revenue, the Auditor-General, Andrew Greaves said the SRO needed to improve its performance for the better of the Government as did the Department of Treasury and Finance (DTF).

“Despite many positive initiatives in recent years to better meet taxpayer needs, SRO and DTF cannot show that SRO has optimised how it collects tax,” the Auditor-General said.

“SRO reliably collects the tax it knows about and the amount it collects has increased over the last five years,” he said.

“However, there is a very high likelihood that SRO could collect more tax by better analysing how effectively it is reducing the tax gap, which is the difference between the tax people and businesses owe and what they actually pay.”

Mr Greaves said the SRO collected state-based taxes, such as payroll tax and land tax which the Government used to fund essential public services, such as education, healthcare, infrastructure, police and public transport.

“It is therefore essential that SRO collects tax effectively and efficiently,” he said

He said the assessment of his audit was to see if SRO “effectively and efficiently collects tax” and if DTF “effectively oversees SRO’s performance”.

Following his review, Mr Greaves said: “SRO does not do enough analysis to determine if it is collecting taxes efficiently.”

“DTF and SRO’s set of public performance measures do not give a clear picture of SRO’s performance.”

He also said: “DTF’s governance of SRO’s performance also requires clarification.”

Mr Greaves said he made six recommendations to DTF and SRO related to: Optimising tax collection; Improving performance reporting and work practices; and Governance of SRO.

The Auditor-General’s 65-page report can be accessed at this PS News link.

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