Standard Business Reporting

Transcription

1 Standard Business Reporting Reducing the Regulatory Reporting Burden Forum on Tax Administration: Taxpayer Services Subgroup 24-26

2 Purpose of Session Promote discussion by explaining the concept of Standard Business Reporting (SBR) and the role tax administrations can play sharing what is happening in a few countries Explore whether a practical guidance paper would be a useful product and, if it would what it should contain and how it might be put together and a timeline for doing so

3 The Regulatory Reporting Burden - Context Governments ask business for the same information at different times in different data sets and different formats Places a burden on business and limits effective use of information within Government Growth of online filing and development of XBRL offer real chance to significantly reduce burden for business and improve use of information within Government

4 Regulation and the Regulator Regulation has a purpose Regulators protect the community and the economy, collect revenue and protect industry and its members Large corporate collapses often blamed on poor actions on the part of the regulator; Enron, HIH, AMP Risks and threats to the community or the economy are usually met with more regulation But Regulatory burdens costs business time and money government mandates in many countries to achieve significant reductions in administrative burden So a better way needs to be found

5 Standard Business Reporting Focuses on reducing the reporting component of regulation and regulatory compliance Does not question the need for the regulation Does not and must not impede the regulators from carrying out their role for their communities Brings together the reporting needs of agencies with similar reporting requirements such as those that rely on financial based reporting (eg Taxation, Company financial, banking and financial risk, statistical reporting) So what is standard business reporting

6 What is Standard Business Reporting? Definition varies across countries but consistent features Creation of a national taxonomy (a sort of data dictionary) owned by Government which reuses existing taxonomies such as IFRS or country GAAPs and which drives Reduction of the number of unique data items demanded by Government Use of XBRL to express the taxonomy requiring Government to accept reports in XBRL Consolidation of different reporting requirements

7 Key Lessons about SBR Must be Government wide policy led initiative. It cannot be achieved by a single agency working alone or as a technology led project but.. Tax agencies are the natural driving force Relies on collaborative work between Government agencies, business, accountants and software developers Is catalyst for improvements by eliminating unnecessary reporting eliminating duplicated reporting improving the electronic interface between business and government agencies so what s needed to get started

8 SBR the right environment Government must acknowledge that there is a problem; namely, a reporting burden that needs to be reduced Will not work if it is a solution looking for a problem there are plenty of other priorities Treat it as a journey not a single release project. It could take 3 or more years to achieve Create a willingness to change; there may be significant inertia or resistance from agencies who do not see any need or take a not invented here attitude accountants and software developers who may make money from the current reporting burdens or do not wish to change products

9 So where is there SBR activity? Those we know of Netherlands - being implemented Australia - business case and implementation plan recently approved by government New Zealand government approval to develop a business case and implementation plan United Kingdom developing proposal for development of a business case and implementation plan Singapore in development and implementation But you may know of more!

10 Netherlands Standard Business Reporting Regulatory burden acknowledged and reduction targets set National Taxonomy Project (NTP) coupled with mandated e-filing for companies announced 2003 Business Case savings initially estimated at 350M since revised upwards Involves Tax, Chambers of Commerce (company reporting) and Bureau of Statistics Partnerships with the software developers and accounting profession Implemented in production this year Provided guidance to other countries that follow

11 Standard Business Reporting - UK HMRC proposal for cross Government investigation agreed by Ministers April 2007 Aim is to report back at end of October demonstrating sufficient high level benefits to justify production of detailed business case and implementation plan. Key participants; HMRC, HM Treasury, Cabinet Office, Office of National Statistics and Companies House. Private sector involved in project board through Institute of Directors and Institute of Chartered Accountants

12 Standard Business Reporting - UK Working definition of SBR adopted namely The creation and maintenance of a national taxonomy for financial data reported to Government (which can include non-financial data if required) Making it possible for all reporters to use that taxonomy to make the relevant reports to Government Ensuring all of Government can accept reports that use the national taxonomy

13 Standard Business Reporting - UK No dedicated resources has made work very difficult Good support from some agencies; others indifferent Objective interest from accountants and business; some software developers feel threatened Difficult to quantify potential business benefits Reducing number of unique data items probably holds key to significant benefits Overall, work looks promising and biggest threat is probably political priority

14 New Zealand Standard Business Reporting Acknowledged regulatory burden Government asks: Why couldn t the many arms of government extend a single hand to business? Open to suggestions for reduction projects Government directed the development of a detailed Business Case and Implementation Plan in August 2007 to be completed early 2008 Ministry of Economic Development (lead), Inland Revenue, Statistics New Zealand and the Accident Compensation Corporation

15 Standard Business Reporting Australia Government sponsored taskforce initiated to eliminate red tape for business (2006) It proposed examination of the Netherlands model for applicability in Australia High level business case signed off 2006 Detailed Business Case and Implementation Plan completed June 07 approved by Government in August 07 Business Case forecasts $795m savings for business per year Includes Tax Office (ATO), Bureau of Statistics (ABS), Securities & Investments Commission ASIC), Prudential Regulatory Authority (APRA) and State Revenue Offices (SROs) Partnerships with software developers and intermediaries being developed Pilots from late 2008, and full implementation by mid 2010

16 Standard Business Reporting Australian Tax Office perspective Reducing regulatory burden is consistent with the ATO business model where we make it as easy as possible to comply ATO suggested the SBR as input into the into the 2006 Productivity Commission report on regulatory burden High level business case developed by a team led by the Treasury including ATO, APRA, ASIC, ABS, SRO s and Customs Have experienced some issues with the SBR initiative being seen to be driven from the ATO. More recently have separated out the ATO s role as a participant (like any other agency) from the cross government coordination role which is a Treasury responsibility

17 Standard Business Reporting Australian Tax Office perspective (continued) While there is a whole of government policy on authentication (Gatekeeper), each agency has a implemented their own solution. SBR requires a single authentication solution. Following an external review, ATO (via the Australian Business Registrar) will upgrade its investment in PKI to be the authentication solution for whole of government B2G interactions. From an internal perspective it has been difficult to find a single area to coordinate the Tax Office input to cross agency harmonisation. ATO has put this function with the office of the Chief Knowledge Officer (CKO) who has responsibility for data standards

18 Standard Business Reporting Australian Tax Office perspective (continued) In Australia there is no central agency to run/operate cross government infrastructure different components will be managed by different agencies/data centres. This adds a level of operational/change mgt complexity As the largest agency involved in SBR the ATO has contributed the majority of staff into the SBR program, particularly at the senior level, and provides significant support on issues such as procurement and design

19 Standard Business Reporting Australian Tax Office perspective (continued) ATO s relationship with software developers (whom we have worked closely with for the past 20 years) will change as SBR develops shift from tactical to strategic We expect configuration/release management to be more complex in the future as we not only need to manage internal ATO systems & software but that of central agencies and third party software developers

20 Standard Business Reporting Australian Tax Office perspective (continued) Getting agreement at the whole of government level adds complexity (communications, governance, project management, external scrutiny, etc ) ATO s existing systems/functions do not lend themselves to being exposed as web services. Our Change program is a pre-requisite to being able to implement SBR

21 Standard Business Reporting Central Theme from these approaches Reporting Taxonomy Formed the basis of the Netherlands Project Is the basis of the Australian programme Likely to be the basis of the UK and the NZ projects All will be based on use of XBRL On estimated savings, SBR will make the largest contribution to reduction of administrative burden in any country

22 Standard Business Reporting - Support Much support available from the projects that are running Too much information is available to meaningfully publish The key people are able and willing to share the information as well as knowledge We need to continue to evolve our approaches to standard business reporting by learning from each other Contacts: Harm Jan Van Burg h.j.m.burg@minfin.nl Paul Madden paul.madden@treasury.gov.au Terry Hawes - terry.hawes@hmrc.gsi.gov.uk