Taxpayers and business owners would be spared the task of filing lengthy tax returns every year if the Tax Office moved to a system of automatic data exchange under a bold proposal which could end the annual lodgement scramble.

In what would be a landmark overhaul of Australia’s taxation system, former Tax Office second commissioner Andrew Mills says real-time or regular information flow from banks, employers and service providers could replace the antiquated notion of “lodgment” and bring the country’s filing system into the online era.