Tax Ombudsman Review of ATO Interest Charges (GIC Remission)

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The Inspector-General of Taxation and Taxation Ombudsman is currently conducting an independent review into how the Australian Taxation Office (ATO) handles requests to reduce or remove General Interest Charge (GIC) on overdue tax debts.

GIC is interest that accrues daily when tax is not paid by the due date. From 1 July 2025, GIC is no longer tax-deductible, which has significantly increased the real cost of outstanding tax debts for individuals and small businesses.

Why this review is happening

The review follows growing concerns from taxpayers and tax professionals that the ATO’s approach to GIC remission has become:

  • Stricter and less consistent
  • Difficult to navigate
  • Unclear as to when remission will be granted
  • Poorly explained when remission is refused

Many taxpayers have reported that similar cases can result in very different outcomes, with limited ability to challenge ATO decisions.

What the Ombudsman is reviewing

The Ombudsman is examining whether the ATO’s GIC remission practices are:

  • Fair and consistent, particularly for small businesses and vulnerable taxpayers
  • Transparent, with clear guidance on when remission may be available
  • Reasonably explained, so taxpayers understand why remission is approved or denied
  • Appropriate, given the financial impact of compounding interest and limited review rights

The review is also considering whether the ATO’s current approach aligns with good tax administration principles and community expectations.

Why this matters for taxpayers

  • GIC can quickly add up, sometimes becoming a significant part of the total tax debt
  • Unlike most tax decisions, GIC remission decisions have very limited appeal rights
  • Reduced flexibility around remission can place additional pressure on cash-flow and payment arrangements

What happens next

The consultation phase has closed, and the Ombudsman is expected to release a final report in early 2026. The findings may lead to recommendations for changes in how the ATO applies and administers GIC remission.

How can we help?

We assist clients in managing ATO tax debts in a practical and proactive way. This includes reviewing outstanding liabilities, helping you enter into or renegotiate payment arrangements, and preparing GIC remission requests that are properly supported and clearly presented. Where interest has accumulated or ATO decisions seem unreasonable, we can guide you through your options and liaise with the ATO on your behalf. If you are experiencing cash-flow pressure or are concerned about interest charges, we encourage you to speak with us early so we can help minimise the cost and stress involved.

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