Tax commissioner Chris Jordan says Labor's proposal for a new commissioner dedicated to resolving small business disputes with the ATO is "interesting" but indicated he didn't think it was necessary.
"I think it is sort of being done," he told the Vodafone National Small Business Summit in Sydney on Friday.
"We have facilitators, we actually have listened to people. We already have moved all of the objection processes, all of the dispute resolution and all of that work out of compliance so it is in a separate group now under Andrew Mills."
If Labor wins the election next year, it plans to install a second commissioner in the Tax Office separate from the original decision makers.
Shadow treasurer Chris Bowen announced the Labor policy on Friday, citing a joint Fairfax Media and Four Corners investigation that revealed the ATO made mistakes in one in 20 tax cases, leaving some small business owners destitute.
ATO claims most objections resolved
However, Mr Jordan is not convinced reform is needed.
"It’s a proposition, it is there, it is not definite. You hear all sorts of things and no doubt leading up to the election we will hear many, many more things there," Mr Jordan said.
"Are disputes the big problem? We have heard about unfair contract terms, we have heard about all sorts of other regulation and problems that small businesses have just to get a loan and just to be able to service it. Tax is an issue for small business and disputes is a little subset."
Mr Jordan said the ATO had 8000 objections from small business out of 3 million activities last year and "most of these were resolved".
Taking on board suggestions
He said the ATO was happy with its facilitation of disputes through mediation and alternative resolution processes.
However, he acknowledged he needed to take into account how businesses perceived the ATO's performance.
"If we think we are doing well but nobody else does, we need to think about that," he said.
Mr Jordan said he was open to having a low-cost, informal but separate body to look at disputes.
"We are not saying we know best, I will listen, I will absolutely take [suggestions] on board and if we think we are doing a proper thing but others don't think so, ok then stop," he said. "It is like hitting my head against the wall, it feels good to stop. I’m willing to take on board any constructive suggestions in this regard. We want it to work and we want people to have confidence."
Industry groups welcomed Labor's proposal, with Tony Greco of the Institute of Public Accountants saying he supported a structural separation within the ATO of a dedicated appeals group.
"Whilst we recognise that the ATO has instigated an expanded independent review process, a separate and dedicated appeals group headed by a new second commissioner would provide a higher level of independence whilst retaining the review function within the ATO," he said. "This would facilitate a fresh and impartial review of the taxpayers' disputes, particularly for small businesses and individuals who do not have the resources to go head-to-head with the ATO."
However, professor Robert Deutsch, senior tax counsel at The Tax Institute, said a new tax commissioner would need to sit outside the ATO.
"If this new commissioner would sit side by side with the current commissioner within the ATO it would be pointless as it would not be seen as having any real independence," he said.
He also said the benchmarks against which complaints would be tested needed to be carefully set and the commissioner would need to have powers of enforcement.
"This is not to say it is an idea to be rejected, just one that needs some careful thinking about," he said. "As always the detail will really matter. "