Law Council of Australia

Business Law Section

The ATO’s approach to taxpayer relief provisions

Submission Date: 2 October 2025

The Taxation Committee and the SME Business Law Committee of the Business Law Section of the Law Council of Australia (collectively the Committees) welcome the opportunity to provide feedback on the Australian Taxation Office’s (the ATO’s) review of how it administers the discretions concerning lodgment and payment deferrals, interest remissions, failure to lodge penalty remissions and payment plans (Concessions using the same nomenclature as the ATO) and set of proposed principles to guide the ATO’s use of the Concessions (Principles).

The Committees welcome the ATO looking to clarify how it administers the Concessions, particularly considering the recent changes to the deductibility of the general interest charge (GIC) and the shortfall interest charge (SIC). These changes increase the penal nature of interest charges, and greater transparency on how the ATO administers the Concessions is warranted to, amongst other things, ensure that non-compliant taxpayers are not dissuaded from reengaging with the system.

The Committees reiterate the insights and recommendations provided in earlier submissions to the ATO on how it could deal better with vulnerable taxpayers and notes that many of the instances covered by the Principles will likely involve taxpayers in vulnerable circumstances, many of which are likely to be exacerbated by the inappropriate non-application of the Concessions.

With those preliminary observations in mind, the Committees provide their feedback in the submission in response to the six consultation questions.

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Last Updated on 07/10/2025

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