ACT Revenue Office 'lacks fair and reasonable approach' to recouping historical land tax debt, Ombudsman finds
The ACT Ombudsman has issued a scathing review of the ACT Revenue Office's heavy-handed collection of historical land tax debts, which it says has left people "confused, upset and distressed".
Last year, the Ombudsman received 10 complaints about the assessments issued for historical debts, spanning back between six and 17 years.
The debts, at times, included backdated interest and penalty tax.
Land tax applies to ACT properties that are not the owner's principal place of residence, such as a rental or vacant property.
An Ombudsman investigation found the ACT Revenue Office's (ACTRO) approach to recouping the money placed a "high burden on individuals" without considering their circumstances.
While the revenue office was found to have acted lawfully, the Ombudsman said systemic changes were needed to fairly collect land tax debts in the ACT.
The Ombudsman's findings come as an ABC investigation revealed criticism of the ACT Revenue Office has been building over its methods of collecting alleged debts from Canberrans, including stamp duty.
People have described ACT Revenue Office notifications and letters as "heavy-handed" and "aggressive", often leaving them feeling "like criminals".
The law does not set a time limit for raising land tax debts, but individuals are only required to keep records for a minimum of five years.
In one case reported to the Ombudsman, Tara* received a land tax assessment for 2006-07 and 2009-10, showing she owed more than $5,000 in land tax and more than $1,800 in penalties and interest.
She was asked to confirm records dating back to 2006, documentation she had not retained having sold the property five years after purchase.
Tara paid the full amount to avoid further charges but was later refunded the $1,800, six months after requesting a review.
The Ombudsman found the ACTRO had "no procedural guidance for its staff to address the sensitivities of recouping historical debt".
It also noted people felt threatened by the risk of incorrectly recalling historical details and committing an offence.
The complaints to the Ombudsman also raised concerns about the short length people were given to pay off their debts.
In one case, Charlotte* was ordered to pay more than $5,000 in land tax and another $7,000 in interest and penalties within five weeks.
The pensioner was experiencing financial hardship and signed up to a 12-month payment plan.
People on payment plans continue to accrue interest — a process the Ombudsman said should be reconsidered.
Individuals who disagree with the assessment notice can request a review, but interest will also continue to accrue during the objection process.
The Ombudsman found fewer than half of objections were dealt with within six months, while others had to wait more than a year.
"We were given just over six weeks from the date of the notice to pay the charges listed on the notice of assessment," a complainant told the Ombudsman.
The Ombudsman found the ACTRO needed to improve how it manages objections "before using AI [artificial intelligence] and automation to generate lists for staff to send thousands of request for information emails".
The Ombudsman made four recommendations to improve fairness, accountability, transparency and communication.
In a letter to the Ombudsman, ACT Revenue Commissioner Kim Salisbury said he agreed to all the recommendations and would work with the Ombudsman to "contemplate changes to our processes".
"ACTRO is committed to ensuring a customer focus with fairness and transparency in its processes," Mr Salisbury said.
"While your examination of the 10 case studies has highlighted some useful aspects of future work for ACTRO, it is in the context of 4,300 land tax compliance assessments issued by ACTRO since 2022."
ACT Shadow Treasurer Ed Cocks welcomed the Ombudsman's findings, describing the report as "a wake-up call".
"This report highlights the deeply entrenched culture within the ACT Revenue Office," Mr Cocks said.
"[It's] one that prioritises clawing back cash over treating Canberrans fairly.
"It's outrageous that people are being pursued for decade-old debts through the revenue office's broken process, with little notice and limited opportunity to challenge them."
Finance Minister Rachel Stephen-Smith met with the Ombudsman to discuss the investigation and said the government would "expedite" work to improve revenue office correspondence with Canberrans.
"I have been concerned to hear about the distress experienced by some Canberrans as a result of their engagement with the ACT Revenue Office," Minister Stephen-Smith said.
"The Revenue Commissioner has accepted the Ombudsman's recommendations, and I will be meeting with him tomorrow to discuss how expertise from across government can be brought to bear to support their implementation."
Ms Stephen-Smith said she would seek further policy advice from the revenue office and ACT Treasury about improvements that could be made to processes for claiming concessions, undertaking compliance, and the application of penalties and interest.
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