Law Council of Australia

Business Law Section

ATO’s management of remission of the general interest charge

Submission Date: 13 November 2025

This submission concerning the Tax Ombudsman’s review (Review) of the Australian Taxation Office’s (ATO’s) management of remission of the general interest charge (GIC) is made by the Tax Committee and the SME Business Law Committee of the Business Law Section of the Law Council of Australia (the Committees).

Annexed to this Submission are:

  1. the Committees’ submission to the ATO’s approach to taxpayer relief provisions;
  2. the Law Council of Australia’s submission on the draft ATO vulnerability framework; and
  3. the Committees’ submission to the ATO on Improving how the ATO deals with Vulnerable Taxpayers.

Many of the issues and recommendation in those documents are relevant to the Review and are reflected in this Submission.

Executive summary

The Committees welcome the Ombudsman’s Review. The Terms of Reference (TORs) say complaint data shows GIC remission is an often-raised concern, and the removal of deductibility from 1 July 2025 heightens the cost impact for small businesses and others in financial stress. It is therefore critical that ATO processes deliver fair, correct, and consistent decisions the first time.

Against the Ombudsman’s TORs, we recommend practical improvements:

  1. publish clear public criteria and channels for remission;
  2. adopt a structured, evidence-based decision framework that centres on particular taxpayer circumstances and situations of taxpayer vulnerability;
  3. allocate decisions to trained specialists for remission decisions;
  4. create an internal merits-style review for taxpayers to initially challenge an adverse GIC remission decision;
  5. provide reasoned, written decisions for refusals to remit GIC in full;
  6. integrate remission with payment plans using concurrent assessment;
  7. strengthen quality assurance (QA) and transparent reporting, and
  8. provide a clearer channel for practitioners (both tax agents and legal practitioners) to communicate electronically on GIC remission decisions (and other debt remedial powers).

These recommendations reflect the TORs focus areas and draw on the Committees’ prior submissions to the ATO on taxpayer vulnerability and ‘concessional’ powers.

Context and framing

The TORs ask whether ATO policy and guidance clearly explain when and how to request remission, and the criteria for full versus partial remission; the rationale for a recent tightening; the fairness and consistency of decisions; the quality of reasons; how remission interacts with payment plans; and opportunities to improve systems and processes.

This submission is informed by Committee member’s front-line experience (including inconsistent assessments, limited escalation, and templated refusals) and by our previous feedback recommending principle-based improvements to ATO dealing with debt ‘concessional’ powers and dealing with taxpayer vulnerability in practice.

Related Documents

Last Updated on 18/11/2025

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