By Angela Dorizas

A re-elected Labor Government would establish a new advisory board to scrutinise practices of the Australian Taxation Office, the Assistant Treasurer, Senator Nick Sherry, has announced.

In an address to the Australian Economic Forum in Sydney on Thursday, Senator Sherry said the Federal Government would establish a Tax System Advisory Board within the Australian Taxation Office (ATO).

“The Tax System Advisory Board, which will be established by statute, will advise the Tax Commissioner and ATO Executive Committee on the strategy, direction, culture, organisation, management, compliance planning, staff profile and information technology plans at the ATO and to provide a new, direct and in-built voice for the business and taxpayer communities in relation to ATO decision-making and culture,” Senator Sherry said.

“The Tax System Advisory Board, which will be similar to a strategic private-sector style board, will be made up of non-government members and will commence its work with a review of the ATO’s management practices to ensure the highest level of corporate governance.”

The announcement follows on from the Australia’s Future Tax System (AFTS) review, which recommended the creation of a tax system advisory board.

“Tax system advisory boards already exist in other key comparable jurisdictions, including the United Kingdom, the United States and Canada, and establishing such a board was the key governance reform recommended in the independent tax review,” Senator Sherry said.

Community consultation on the Tax System Advisory Board is expected to occur later this year.

The Government has also promised to “boost and reshape” the role of the Board of Taxation, empowering it to initiate its own reviews of tax policies and procedures.

“The independent tax review recommended that the Board of Taxation be reformed in this way to provide a ‘circuit-breaker’ in our tax system to identify, and propose solutions for, policy issues or unintended consequences of tax laws and tax interpretations,” Senator Sherry said.

The membership of the board would also be adjusted to ensure it is “correctly balanced and fully representative,” he added.

“These reforms will reshape the governance of our tax administration – the internal pipes, the building supports, the structures, that don’t always get a lot of attention but which are critical to a well functioning tax system and a well functioning economy.”