New research reveals that over half of Australians (56%) are worried and fearful when it comes to lodging their tax returns with missed deductions, not knowing whether to expect a tax refund or bill, and making a mistake being flagged as the leading causes.
The findings quantify the view and shared perceptions of many Australians that doing taxes is a generally confusing and negative experience, with two in five (42%) of respondents stating they have a distrust for the ATO, and three in five Australians (63 percent) think the Australian tax system is unfair.
Commenting on the research, TaxTank founder Nicole Kelly said: “the findings of this research reveal that there is a clear imperative to enhance tax confidence, and also underscores the need for accessible, automated and transparent solutions to help simplify the overall tax return process and to boost familiarity with the system”.
The Australian individual tax return is one of the most extensive and complex in the world, enforced by an advanced compliance program which sees over 20+ computer models scrutinising every return to detect abnormalities.
In 2020 alone, there were 468,000 adjustments arising from tax audits, resulting in a total revenue gain of $13.7 billion, likely strengthening from the trend of self-lodgement through the ATO’s MyTax platform. According to the ATO, 34% of all individual taxpayers opted to lodge their returns via MyTax, which was up 5% from the previous year. Expect to see this number rise again this financial year, with 53% of survey respondents indicating they intend to lodge through MyTax.
“Given this backdrop, it’s unsurprising that we’re seeing more Australians deciding to adopt automated tools like MyTax; however, self-lodging alone can sometimes result in paying more tax than you need to, especially if your return is outside of the benchmarking ‘norm’. In which case, myTax will prompt you to check your data based on the ‘nearest neighbour’ method, as they call it, and this is where we see people have doubts and not make claims because they’re not 100% confident in the tax rules or their ability to adequately substantiate. These automated tactics generated warnings for 340,000 taxpayers in the 2020 financial year, resulting in a loss of potential deductions of around $37 million.
“It’s for this reason which we decided to launch TaxTank, a cloud-based tax platform which provides Australians with clear visibility on their tax position throughout the year, offering a way for them to easily plan for tax time, removing the uncertainty, ambiguity and stress which has become synonymous with lodging tax returns” Nicole added.
With 45% of Australians unsure of how much tax they paid last financial year, the time has come for the everyday taxpayer to take control of their finances and become an active, informed participant in one of their biggest yearly expenses.
About the survey
The survey was commissioned by TaxTank and undertaken by Pureprofile to analyse habits of individual Australian taxpayers ahead of the 2022 tax season. Their attitudes towards managing their taxes, sentiment towards the Australian tax system and spending intentions was also analysed. From 29 April – 4 May 2022, Pureprofile conducted an online quantitative survey, interviewing 1000 Australian taxpayers. The survey is nationally representative.