NSW Audit Office - Financial Reports - 2004 - Volume 5 - Complaince Review of Aspects of a New Tax System

Compliance Review of Aspects of a New Tax System (Goods and Services) Act 1999 The Goods and Services Tax (GST) began on 1 July 2000. At the time, for many government agencies, GST was the largest and most demanding tax they had encountered. As a result many needed to update their systems and train their staff in the requirements of the legislation. Like businesses in the private sector, public sector agencies must be registered for GST. Agencies must forward to the Australian Taxation Office (ATO) the GST they collect as part of the sales of their goods and services and other taxable supplies. They may also be able to claim input tax credits for GST included in the price of good and services they purchase. Any deficiencies in the manner in which they deal with GST could result in the overpayment/underpayment of tax, ATO penalties and/or cash flow problems Like businesses in the private sector, government agencies are subject to audits by the ATO. CONCLUSION With one exception, the 18 agencies we reviewed rated satisfactorily when compared with best practice. The accounting system at NSW Fire Brigades cannot handle GST and as a consequence numerous manual processes are required for them to meet their GST obligations. Despite the fact that not all GST processes in the agencies reviewed were best practice, there was no evidence to suggest that they are not meeting their GST obligations. KEY FINDINGS Almost a quarter of the agencies reviewed had not ...