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Australian Tax Office using Benchmarking to expose variances in Taxation lodgements and EBay product sellers.

By: admin|

Whilst benchmarking has been around for many years many people do not really understand the ability of the taxation office to compare all businesses in the cash economy against their peers when submitting taxation returns. All the data that has now been collected over the past years and has been installed into their advanced technology system and they are now in a much better space to monitor and control the cash economy.

Bench marking is best described as a mark that is used as a reference point to assist in determining other variables for the same information presented relative to the same industry or profession. An example of this would be say to look at business that operates in the cash economy say a coffee shop and get an average point on all taxation returns submitted for that industry in the same year. The Taxation office then looks at the annual turnover range and the figures as presented in each return for cost of goods sold/turnover, Labour/turnover and then rent/ turnover. Once the average is obtained for each return they then set a percentage point outside these ranges and all returns submitted that fall outside the given ranges are then investigated further. This process is a simple process now given the advanced technology system being used.

This data mining has produced 46,000 businesses tax returns that will need to be reviewed for the financial year ending 2010 and whilst  they are only stated as reviews at this stage, one may think that some may have some more explaining to do.

Benchmarking is also used by lenders when a client is buying a business or the Bank is assessing a business to understand if that particular business is actually operating in line with industry averages or outside those averages, which then in turn creates conversations.

Interestingly, the tax department are now also able to get a better understanding of who is trading actively online via various sites and who is including the results in their annual returns.

All in all, Australia is heading towards a fairer taxation system whereby everyone will pay their fair share of tax.


2 thoughts on “Australian Tax Office using Benchmarking to expose variances in Taxation lodgements and EBay product sellers.

Australian Tax Office using Benchmarking to expose variances in … « Very Latest Tax News March 6, 2011, 5:15 am

[…] the original post: Australian Tax Office using Benchmarking to expose variances in … Related Posts:Interesting stats from the Australian Tax Office « GST Bulletin According to a […]

Australian Tax Office using Benchmarking to expose variances in … | The Ultimate Tax Guru March 6, 2011, 5:23 am

[…] this article: Australian Tax Office using Benchmarking to expose variances in … Related Posts: AUSWEB BLOG » Blog Archive » Australian Tax Office Embraces … The Australian Tax […]

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