ATO could open door for smaller resellers

Resellers and ISVs may never have thought about pitching huge government departments; they’re simply not in the same league. The Australian Taxation Office is looking to change that perception with an enormous overhaul of its analytics department, which should allow it to engage with smaller providers.  

The ATO is shifting from the old-school approach of massive projects that take years to install and last for a decade. The new mantra is lean and keen with opex replacing hefty capex commitments, and it isn’t just looking at the marquee players. 

The ATO has six concurrent projects overhauling the way it operates. One of note is the Smarter Data project, which will radically transform the analytics capabilities of the ATO so that it can spot anomalies in tax returns the moment they are submitted. 

“If you think about the old world of big production systems, you would have them for 10-15 years,” says Greg Williams, assistant commissioner to the ATO for tax crime and lead for the Smarter Data project.

“In the world of data and analytics, you’re talking a 2-3 year life cycle. That’s where the agility comes in – you have to have commercial arrangements that you can continually scale and move forward.”

Listed on AusTender are several major projects for which 62 vendors have applied and accepted as eligible so far, Williams says. The tenders include data lakes, Hadoop, open source software, enterprise storage, data warehouses and online analytics.

“The process was to open us up to smarter vendors. We didn’t want to have a system that only allowed us to engage with top-of-town vendors; we wanted smaller companies that we could bring to the ATO, trial and work with them,” Williams says.

The Smarter Data project has been experimenting with “nearest neighbour” analytics programs that will search for individuals or companies that have similar characteristics to a chosen profile. The survey of millions of tax returns, activity statements, payroll details and third party sources of data used to take up to two weeks. Now it is finished in 18 minutes.  

Ultimately, Williams wants the results even faster. The ideal is to create near real-time profiles of all individuals and entities. When an accountant submits a tax return the ATO will instantly know if it is missing information or suggest the accountant check certain figures.

This will take even more computing power but Williams says the aim is broader than catching tax cheats. The ATO will notify accountants if they are under-claiming in certain fields for their clients. “We’re trying to use it for good, if you like,” Williams says.

The Smarter Data project will roll out automated payment schedules for approved applicants in June. When a taxpayer rings the call centre the ATO representative will be able to pull up a payment plan almost instantly.

By June next year, the ATO will have largely completed its transition to the Standard Business Reporting framework, which supports the digitisation of all activity statements and tax returns (regular readers of CRN will know I covered this in last month’s column).

All in all, it’s a bumper season for technology purchases at the ATO. The ATO wants to shed its reputation as a slow-moving government department with a taste for mainframes.

Sholto Macpherson is a journalist and commentator who covers emerging technology in cloud