At the same time, a relatively new initiative to standardise government reporting is emerging, which may offer significant long-term benefits.
Standard Business Reporting (SBR) is a government initiative involving Australian Securities & Investments Commission (ASIC), the Australian Taxation Office (ATO), Australian Prudential Regulation Authority (APRA), State and Territory Revenue offices and the Australian Bureau of Statistics (ABS). SBR applies a standardised taxonomy and uses eXtensible Business Reporting Language (XBRL) to collect financial data from an organisation’s accounting system and lodge electronic forms with government.
SBR is currently voluntary and its uptake has been relatively slow since its introduction in 2010. That is set to change with Geoff Leeper, ATO Second Commissioner, confirming last week that the ATO will drive SBR as an initiative to reduce the regulatory reporting burden on business. The ATO also intends to switch off its Electronic Lodgement System from 2015-16, leaving businesses with little choice but to consider SBR.
SBR offers the potential to streamline a wide range of existing State and Federal tax reporting. Although there is initial work to adopt SBR, long-term benefits will include reduced costs and time spent on tax compliance (the Assistant Treasurer announced on 22 November 2013 that the use of SBR by APRA regulated superannuation funds is already saving AU$50M of compliance costs per year).
Greater data integrity will enhance tax risk management. The ATO is commencing a project on accounting based case selection that aims to reduce compliance activity through automated data reporting via SBR.
As CFOs and CEOs gain a better understanding of SBR, Tax functions have the opportunity to lead this change and deliver value by transforming reporting processes.