Tax reveals business register improvements

The Australian Taxation Office (ATO) expects to attract $103.8 million more revenue over four years by streamlining the nation's business identification system, data and processes.

The agency this month won $68.5 million from the Federal Budget to enhance the Australian Business Register (ABR).

The ABR has been in operation for some 12 years -- since the introduction of the GST -- but is bedevilled by application code that runs on two separate versions of Microsoft's .NET platform.

ABR deputy registrar Mark Jackson told iTnews that a new system was being built on a single .NET version, to improve its longevity, robustness and flexibility.

A major revamp to be launched on 28 May will allow companies and sole traders to register only once to be valid in all States and Territories, instead of having to re-register if they were operating in more than one state or had to move.

Of the $68.5 million to be spent over four years, $63 million will go towards ABR administration, such as mail-outs to check whether a business is still operating, visits to registrants and support.

A further $5.2 million will fund an application development project that will expand ABR data fields to include geocoded addresses, details of branches and comprehensive associated data.

The ABR has historically used postcodes to locate businesses; however, those were deemed too broad for effective policy use, especially by local councils planning business support infrastructure.

In-house application developers are expected to use G-NAF (Geocoded National Address File), which contains about 12.6 million physical addresses, each linked to a unique latitude and longitude.

The geographic-aware service will also extend to company branches, providing local councils with a better feel of business activity within their boundaries.

Jackson noted that the Tax Office would have a better means of discovering businesses affected by bush fires, floods, or other geographically relevant issues.

Tax Revenue upsides

The ABR was one of the few Federal IT boosts dedicated to the business sector this year. Budget estimates suggest the new improved ABR will increase revenue by $103.8 million over the four-year funding period.

Jackson said the ABR had some 7.1 million “active” registrations.

“About half of ABNs are individuals as sole traders," he said. "We need to be cautious that people are not obtaining an ABN [Australian Business Number] inappropriately and assure that correct tax is paid.”

Jackson said each case had to be determined on its merits. But there were well-known ploys operating in construction and other industries that distort the purpose of an ABN.

Some employers require their staff to become “contractors” so as to avoid withholding taxes, superannuation as well as payroll taxes and gain an unfair cost advantage over competitors.

“We are seeing things like call-centres, where people are being asked to get an ABN to work in a call centre,” Jackson said. “Generally, you would think someone that works in a call centre is an employee.”

Last year, ABR refused some 36,727 new registrations at the point of registration and cancelled 51,103 ABNs after finding the holders were no longer entitled to be registered.

The number of monthly searches through the ABR service in 2010-11 peaked at 21.5 million. On average, there were 15 million searches a month to verify details of businesses, up 55 percent from 2009-10.

The new ABR system will incorporate more systematic checks. Where necessary ABR will follow-up on arguable arrangements to improve compliance activities.

A further release of the ABR due later this year will help consolidate a range of actions that users need to undertake at present.

Jackson promised a better online user experience where a business could click on an icon which automates a faster turn-around of the business name.

“This whole world of ebusiness is a challenging one for the Government,” he said.

“The more people have to report on paper, the more we’ll encourage automation and we can offer a streamlined service to do their business more efficiently.”