KEY POINTS
- The ATO's MyTax portal was launched a decade ago.
- It's easier to use than its predecessor, eTax.
- But the majority of Australians continue to use an accountant to lodge their tax return.
Ten years ago, the Australian Taxation Office (ATO) created the myTax portal, an easy way to lodge your tax return online.
There was an “e-Tax” filing option before the 2015-16 tax year, but this was quite complicated and barely better than filling out a form online.
In comparison, myTax is simpler and more automated. It’s available 24 hours a day, is free to use, and you will typically get your refund within .
But chances are you won’t be using it.
In fact, slightly less than 36 per cent of Australia’s 15 million taxpayers used the myTax portal in 2020-21 – the most recent tax year for which the tax office has published data.
About 64 per cent of tax returns were lodged through tax agents. This is one of the highest rates among the 38 OECD nations.
Meanwhile, just 0.6 per cent of Australians still used the paper-based form.
So why have Australians – who have quickly embraced the internet for everything from shopping to dating – been so slow to embrace myTax?
For some, particularly older people, it’s about being intimidated by the technology. Others may be concerned with cybersecurity risk.
But for most, it’s about the perceived complexity of the tax system and the process, regardless of the technology. They see using a tax agent as easier and the way to maximise their tax refund.
While in some cases this may be true, in many instances it’s simply a perception – but one the tax office will need to address if it wants to promote use of myTax.
Reasons for low myTax uptake
193 taxpayers who have used the system were surveyed. About three-quarters agreed the system was clear and understandable, and said they would keep using it.
But, of course, these are people who have chosen to use the system, so their responses don’t shed much light on the reasons people don’t use myTax.
Answers to that come from other published research, in particular from the Inspector-General of Taxation (the independent office investigating complaints about the tax system) as well as the House of Representatives’ Standing Committee on Tax and Revenue.
Evidence submitted to these bodies indicates that Australians prefer tax agents to avoid errors in claiming deductions.
The parliamentary committee’s 2018 inquiry into the tax system was told the use of tax agents ballooned from about 20 per cent in the 1980s, peaking at about 74 per cent of all taxpayers:
In short, habits are hard to break. Having come to rely on tax agents, most Australians keep using them, despite the system being vastly improved.
For example, the myTax system now simplifies the process by pre-filling data from government agencies, health funds, financial institutions and your own employer. About 80 per cent of our survey respondents said this was helpful.
Taking care of the digital divide
This suggests the main barrier to increasing use of the myTax system is mostly habit and the perception the tax system is too complicated to navigate without an expert.
There is also a small percentage of people who feel uncomfortable with computers.
This is reflected in the minority of respondents in our study who said they were unlikely to use myTax again, as well as the tax office’s data showing some people continue to stick with paper lodgement.
Those more likely to find the system daunting are the elderly, those with low English skills, people with disabilities and those with low educational attainment.
Jawad Harb is a PhD candidate at RMIT Univeristy.
He receives funding for related research from RMIT University. He is affiliated with RMIT University as a PhD candidate. He also receives a Research Stipend Scholarship (RSS-SC) funding from the Australian Federal Government to complete his PhD degree. Jawad is affiliated with St John Ambulance Victoria as a volunteer.
Elizabeth Morton is a research fellow of the RMIT Blockchain Innovation Hub and a taxation lecturer at RMIT University.
Elizabeth Morton is contracted to co-facilitate a short-term training contract for tax and crypto facilitated by UNSW for the ATO. This is not related to the topic of this article. Elizabeth has not received grant funding for research in relation to the content of this article; however, does undertake research in this space.
