Financial industry, Trading and Earnings :: World finance

Tax office turns off etax and replaces it with free faster system


E-TAX, the free online tax return system used by millions of taxpayers, has been shut down by the Australian Taxation Office.

The ATO will announce next week that it has retired e-tax and is replacing it with its simpler, internet-based sister myTax.

The move means that all of the three million Australians who do their own tax will have to use myTax, which was launched in 2014 as a free, fast and simple way to navigate tax time.

More than 25 million tax returns were filed using e-tax since it started in 1999 but ATO assistant commissioner Graham Whyte said it had become quite old and could only be downloaded as software onto a PC.

He said myTax could be accessed on a computer, smartphone or tablet, and had been expanded this year to do everything e-tax could do and more.

Property investors will be able to lodge using myTax for the first time, with help from new online tools to record depreciation and capital allowances.

myTax makes it very easy to lodge your tax return yourself, particularly if you have got relatively simple affairs, Mr Whyte said. The ATO estimates that five million of the 12.5 million people who lodge returns have relatively simple tax affairs.

Almost three-quarters of taxpayers use agents and accountants to do their tax, typically paying between $300 and $400.

Much of the work to produce tax returns has become automated in recent years, with ATO systems pre-filling peoples returns with details such as wages, bank interest, share dividends and private health insurance information. Taxpayers often only need to acknowledge that it is correct.

While myTax can be accessed through the governments portal or website, Deakin University department of accounting senior lecturer Adrian Raftery said he did not expect a big jump in people wanting to do their own tax.

There will definitely be a natural increase as more of society are becoming more comfortable with doing their affairs online, Dr Raftery said. People with complex tax issues will still seek the advice of the experienced tax adviser.

The biggest issue for me is the timeliness of third-party information such as interest, dividends, managed funds and private health data that gets downloaded.

In the past this can take four to five months. If the Government are serious about myTax truly working well, then they need to improve the availability of this information being imported directly into the online tax return.

Mr Whyte said the ATO was working closely with banks, employers and other data providers and hoped to get all pre-filled data earlier this year, by the end of July.

What we are saying to those who are a bit unsure about myTax is to give it a go youll probably have your tax return lodged in a fraction of the time, he said.

The feelings mutual with australias new breed of banks

IT’S banking, but not as we know it.

Mutual banks didnt exist a decade ago, but today count close to one million Australians as their customers and owners thanks to their strong customer focus and competitive rates.

Most of the nations 18 mutual banks are former credit unions and building societies that changed their name after regulatory changes a few years ago allowed them to use the term bank.

There are still 61 credit unions and four building societies operating in Australia and, with the mutuals, make up the customer-owned banking industry, which has four million members, no shareholders to satisfy with dividend payments, and operates on a one-vote-per-customer model.

Mutual banks achieve higher customer satisfaction scores than retail banks such as the Big Four, says research group Canstar, and their credit card and home loan interest rates are consistently lower than the major banks.

Compare home loan interest rates

For example, standard credit card interest rates average 12.57 per cent, below the retail bank average of 17.82 per cent and also below the credit union average of 12.9 per cent. Interest rates paid on online savings accounts and term deposits are also slightly higher than traditional banks.

Beyond Bank Australias general manager of customer experience, Nick May, says it is a challenge to attract new customers without the marketing dollars of the big for banks, but those who do join a mutual bank rarely leave.

Our customers are our owners and so everything we do has our customers at the centre of our thinking, he says.

Pippa Wanganeen switched from a big four bank to Beyond Bank two years ago because of its friendliness and customer service.

I like this bank because it offers a full banking solution and also they are very community-minded, and that really appealed to me, she says.

Canstar spokeswoman Justine Davies says the name changes to mutual banks in the past five years have mainly been marketing-related, aiming to appeal to older members and also attract younger members who may be unclear about what mutuals offer.

Back in 2010 when the federal government announced a reform to allow credit unions and building societies to adopt the term bank in their name if they met certain capital requirements, there was some concern that some people might be mistakenly worried about the security of their money in a building society or credit union, she says.

Its a false worry, but older generations particularly might still remember various building society crashes in the late eighties and early nineties. Even though we do like to bank-bash, we also recognise reluctantly that our banks are safe.

The $250,000 Federal Government guarantee on customers deposits applies to all regulated financial institutions, including mutual banks and credit unions.

A Customer Owned Banking Association spokesman says regulator data shows that mutual banks assets grew 50 per cent faster than the major banks last financial year, and their home loan growth was almost twice as strong.