Conclusion

We are pleased to see that in the wake of our inquiry the Government has announced proposals to make a number of policy and administrative changes to enhance the fairness and clarity of the tax system. It is also pleasing to see steps being taken to simplify the tax system for small businesses. This should reduce compliance costs and make it easier for businesses to meet their obligations. However, we consider that more is required for perceptions of the fairness of the tax system to improve markedly. Our recommendations, if acted on will, in our view, greatly contribute towards this.

In addition to legislative and policy changes, we consider a shift in culture is necessary. We note that an effort has begun. However, more is required to ensure that the focus of the department is on achieving the highest standards of service possible to taxpayers.

We consider that the next Finance and Expenditure Committee has a significant role to play in continuing to examine the powers and operations of the department. Primarily, we suggest the next committee should:

• closely examine the outcome of the post-implementation review of the compliance and penalties regime
• review the effectiveness of the department’s new organisational structure to assess whether service to taxpayers has been improved
• assess the adequacy of the Government’s response to the recommendations in this report.