The Australian Taxation Office: Digitalisation Plans

11/4/25, 3:00 am

By Imran Hussain

The ATO outlines Key Focus Areas for Tax 3.0 Plans

The Australian Taxation Office (ATO) is driving forward its Tax Administration 3.0 initiative, aiming to create a more digitalised and seamless tax experience for small businesses. The focus is on improving automation, reducing compliance burdens, and ensuring businesses have confidence in meeting their tax obligations correctly.

A Phased Approach

At the Accounting & Business Expo 2025, Michael Morton, Assistant Commissioner at the ATO, emphasized that the transition to a fully digital tax system would be a gradual process rather than an overnight shift. The ATO is prioritizing incremental advancements, leveraging technology to improve tax compliance and prevent errors before lodgment.

Focus Areas

Encouraging more frequent reporting to help businesses stay on top of their tax obligations.
Enhancing error detection using digital tools to identify and correct mistakes before submission.
Utilizing third-party data from banks and software providers to ensure businesses get their tax obligations right from the outset.
Simplifying PAYG instalments through software-driven automation, reducing manual calculations and errors.
Exploring payment innovations to streamline tax payments for small businesses.

Engagement with the Tax Profession and Small Business Community

The ATO is actively collaborating with tax professionals, small businesses, fintech providers, and industry associations to shape the future of digital taxation.

Feedback from these stakeholders has highlighted key priorities:

Fairness and confidence in the tax system, ensuring a level playing field for all businesses.
Greater certainty and assurance, enabling businesses to proactively address mistakes without penalties.
User-friendly and modern digital solutions to simplify compliance.
Flexible engagement options, allowing businesses more choice in how they interact with the ATO.

The ATO is inviting small businesses and tax professionals to provide input on how digital tools can improve record-keeping, simplify tax compliance, and enhance collaboration with trusted advisors.