Review: ATO’s management of remission of the general interest charge

The Tax Ombudsman is undertaking a review of the Australian Taxation Office’s (ATO) decision making in relation to the general interest charges (GIC) on tax debts.

In particular, we are reviewing where the ATO agrees (or does not agree) to requests for the interest to be reduced or removed (remitted) when taxpayers are seeking to pay their debts.

We will examine whether the ATO’s GIC decisions are:

• consistent with the law
• meeting community expectations
• meeting the principles of good tax administration, and
• supporting taxpayers with empathy and respect.

Why are we investigating?

Compliance with tax obligations is the responsibility of all taxpayers. A key obligation is for taxpayers to pay their tax liabilities as and when they fall due. Failure to do so may lead to the accrual of interest on the unpaid debts. With the current interest charge rate at around 11% for unpaid debts, for some taxpayers the interest itself may very quickly become larger than the original debt.

While the government and community should be compensated for deliberate late payment of tax liabilities, and late payment should be discouraged, we recognise that most people are trying to do the right thing. It is important to recognise that there may be a range of factors that impact a taxpayer’s ability to pay their liabilities on time.

The ATO states that taxpayers may seek to have interest remitted where certain criteria are met. The ATO’s Practice Statement Law Administration PS LA 2011/12 provides guidance on how those criteria are considered in the remission of GIC.

The ATO has publicly stated its intention to take a stricter approach to debt collection and GIC remission and the effects of this shift in the ATO’s approach has been widely reported. In addition, the law has also been amended so that GIC incurred after 1 July 2025 is no longer tax deductible.

It is important that ATO decisions are supported by policies, systems and processes that align with principles of good tax administration, such as consistency, transparency and getting it right.

What our review will examine:

• whether ATO policy, communications and guidance to staff and the public about how it considers GIC remission requests, are clear
• the reason behind the ATO’s recent decision to tighten up its remission of GIC and the intended outcomes
• whether remission decisions are fair and reasonable and are made consistently for taxpayers in like circumstances, regardless of whether they are represented or unrepresented, and individual circumstances are taken into account
• whether taxpayers are given adequate reasons not to remit interest
• whether the interaction between GIC remission and payment plans support fair outcomes
• whether there are opportunities to improve GIC remission systems and processes, in light of the growing cost impact on taxpayers.

How you can get involved

We encourage and welcome input and contributions from individuals, tax professionals, community organisations, industry groups and other interested parties.

You can take part in several ways:

1. Survey

Complete a short survey to provide your feedback. The survey comprises 5 multiple choice questions and one free-text question about your GIC remission experiences.

Your information will only be used for the purposes of informing the review. It will not be shared with anyone outside the review team or published in the final report. You can provide your email address (optional) if you wish to be kept informed of review progress and Tax Ombudsman news and events.

2. Webinars

We will host a series of webinars to collect feedback on people’s experiences with GIC remission.

The webinars will run for 1 hour and will include a brief overview of the review terms of reference, before giving attendees the opportunity to provide feedback and case studies. All feedback collected will inform our review.

Register to participate by clicking on the links below:

Webinar – for tax professionals and peak bodies

12 noon – 1pm (AEST) Thursday, 25 September 2025

Register here

Webinar – for tax professionals and peak bodies

2 – 3pm (AEST) Thursday, 2 October 2025

Register here

Webinar – for individuals and business owners

12 noon – 1pm (AEST) Friday, 3 October 2025

Register here

Another webinar will be held on the review’s completion, with a presentation on recommendations. Keep an eye on this page or our LinkedIn page for updates.

3. Submissions

Submissions will be accepted until 5pm (AEDT) Friday, 10 October 2025. You can make a submission online, by email, post or phone call.

We encourage you to review the terms of reference when making a formal submission, although we welcome all submissions in any format.

Submit by email to [email protected]

Send postal submissions to:

GIC Remissions Review
Tax Ombudsman
GPO Box 551
SYDNEY NSW 2001

Phone submissions: (02) 8239 2123

4. Professional bodies

Professional bodies will be directly engaged by the Tax Ombudsman. Professional bodies may also like to make a formal submission using the details above.

5. Other research

We will analyse a sample of GIC remission cases to assess whether the decisions were made fairly, consistently and clearly. We will also review prior Tax Ombudsman complaints for insights or themes that we will draw on in our review. The details of individual complaints, and the people who made them, will not be published or shared outside the Tax Ombudsman.

We will also conduct research on issues and feedback previously raised by representative bodies in consultations and through our communication and engagement activities.

Next steps?

Submissions are open until 5pm (AEDT) Friday, 10 October 2025. We expect to publish our report in early 2026.