What You Should Know About Taxpayer’s Covenant?

Thursday, 19 Dec 2019

The Taxpayer’s Charter was introduced in 1997, and it lays down the guidelines in which the Australian Taxation Office (ATO) must deal with the taxpayers in Australia. Being the primary revenue collection agency in the country, the ATO has to follow the Income Tax Assessment Act 1936 to use its powers in the collection of taxes.

The ATO expects people and businesses to comply with the regulations and build a bond of trust and mutual respect with the agency. The Charter was created to help taxpayers become aware of their obligations and rights. Most experienced bookkeepers in Melbourne can assist you in understanding the services provided by the ATO, its review system and ways of acting upon complaints.

The taxpayer’s covenant comprises two overview booklets and ten other supporting booklets which give details about the taxpayer’s rights and obligations. Let us take a look at what information should be known to you about the Charter when running a small business in Melbourne.

List Of Your Rights As A Taxpayer

If you are not clear about your rights, then let your bookkeeper inform you about the same. You can also take a look at the list below to stay up-to-date.

1. Right To Get A Fair And Reasonable Treatment

The ATO must treat the taxpayer with courtesy and respect and show complete impartiality and honesty. The agency must abide by the law and resolve all matters quickly and fairly. They must be sensitive towards the diversity of the Australian community.

2. Right To Be Treated As Honest

The ATO should consider the information submitted by a taxpayer in Melbourne as an accurate and honest summary of his financial data. If the details are found to be inaccurate, the ATO can review them and discuss the mistakes to clarify whether they were made deliberately or inadvertently.

3. Right To Get Professional Assistance

You can get a tailored service from the agency and get contact details of people who can be contacted for queries and further information. Your bookkeeper can stay in touch with the ATO and get a timely response for any information sought. They must provide the information in English and other preferred languages of the taxpayer.       

4. Right To Be Represented And Seek Advice

The taxpayer has the right to be represented by a person of his/her choice while dealing with the ATO. Most business owners in Melbourne ask their bookkeepers or tax agents to do the job as they are often busy with other work. They also have the right to seek guidance from a bookkeeper for filing returns, preparing activity statements and getting tax advice.

5. Right To Privacy

The taxation office must keep all the information, which is secured from the taxpayer or other sources regarding the business in Melbourne, confidential.

6. Right To Confidentiality

The personal information of the taxpayer must be safeguarded by the ATO as they are bound by the Australian Privacy Principles, Privacy Act 1988, secrecy provisions in the taxation law and the Australian Government Agencies Privacy Code.       

7. Right To Access Information Held by The ATO

You have the freedom to access the information related to your business in Melbourne held by the office, such as the latest tax return.

8. Right To Correct And Complete Information

The ATO must provide comprehensive and correct information to taxpayers so that they know about their rights and obligations. They can question the office regarding any point that is unclear or hire a bookkeeper to get things sorted. It will also prove beneficial in enjoying a stress-free tax season.

9. Right To Explanation

The ATO must provide a written explanation of its decisions to the taxpayers or the appointed representatives. In some rare cases, a verbal explanation may be provided.

10. Right To Review

If you plan to review a decision of the ATO, the office must provide you with the information of ways of performing the review and its timeframe. An independent officer will be appointed to carry out the review in the least possible time.

11. Right To Make A Complaint

A taxpayer has the authority to file a complaint against the ATO if he/she is not satisfied with the services provided by the office. You can ask your bookkeeper to resolve the matter with the ATO, and if it doesn’t make you happy, you can send your complaint to the Inspector-General of Taxation and Taxation Ombudsman (IGTO).

12. Right To Easy Compliance

The ATO works on making it easy for people to follow the guidelines of the office. They offer digital services which bring down the time and effort required to deal with the agency and keep informing the people of Melbourne about the latest updates.

13. Right To Complete Accountability                  

The ATO is accountable to the people of Australia and the Parliament.

List Of Your Obligations As A Taxpayer

Besides exercising all the rights extended by the office, the taxpayer must follow the obligations to maintain a trusted relationship with the authority.   

1. Must Be Honest

For the tax and superannuation system to work in an appropriate manner, the taxpayer must provide all the information related to his/her business accurately. You must be honest while dealing with the office and when being asked questions by the contact officer.

2. Must Keep All The Records

Your bookkeeper must save all the financial records of your business for at least five years as they are helpful in creating the activity statements, filing tax returns and other documents.

3. Must Take All Precautions

You must responsibly work towards completion of your documents. When the work is being done by a professional bookkeeping company in Melbourne, then you must take out some time to have a look at the statements and keep checking with them about the accuracy of the numbers.

4. Must Submit Reports By The Due Date

The ATO has specified dates for the submission of reports including tax returns, activity statements and other important documents. Your bookkeeper must adhere to these dates, and in case of a delay, he/she must speak to the office and discuss the problem to get an extension if possible.  

5. Must Pay As Per The Deadline

You must pay the taxes by the last date specified by the ATO. In case you are falling short of funds, your bookkeeper must contact the agency before the deadline and get an extension. The office can consider special cases and allow payment through instalments or late interest-free payments.

6. Must Be Cooperative

While dealing with the ATO, the taxpayers must be cooperative and helpful. If they obstruct the proceedings or do not cooperate with the contact person appointed by the agency, then they can be penalised and even prosecuted for the same.


Every small business owner in Melbourne must be aware of the taxpayer’s covenant to understand his/her rights and obligations. If you are still confused about the Charter, then consult your bookkeeper or get more information from the office.  




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