Indeed in light of the desirability of rewarding greater compliance with better

Indeed in light of the desirability of rewarding

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Indeed, in light of the desirability of rewarding greater compliance with better service where this is a principled thing to do, Key Client Managers could be allocated to the largest 100 corporate taxpayers in the country, measured by amount of tax paid over the past five years, rather than to the largest 100 corporations in income . The Canadian Audit Protocols (Revenue Canada, 1996) are not just about a move to real time and better coordinated audits; they are also about building cooperative relationships. Negotiated Protocols offer the potential to reduce compliance costs for business and increase compliance effectiveness for the ATO. This might involve scheduling visits by different areas of the ATO so that disruption to business is minimised, holding concurrent audits, and assisting business with knowing in advance the form in which financial records might be kept to avoid double handling. The key idea is that a tax administrator and participating large businesses can jointly produce a written framework that establishes guidelines and standards for building and maintaining a relationship for managing compliance. While financial rewards that are identified as rewards for compliance can be dangerous in the signal they give, this is not true of the informal rewards of praise and giving credit where credit is due. Moreover, most people underestimate how important these are to assisting business regulatory compliance. In Makkai and Braithwaite’s (1993) study of Australian nursing home regulation, the use of informal praise by government inspectors was associated with improved compliance over the next two years after controlling for other causes of compliance. An activity that could be underestimated in its value is a letter from the Commissioner to a large corporation that has moved from an obstructionist to a cooperative approach to compliance. Such a letter could thank the relevant executives of the corporation for the cooperation they afforded to ATO staff in doing their job and for the reasonableness they displayed in assuring that agreement could be reached on a just tax assessment. On all manner of smaller things, thank-you letters by more junior ATO staff and face-to-face expressions of appreciation are important compliance activities. Large businesses that have exemplary corporate compliance systems and governance processes especially merit positive recognition both verbally and/or in writing. In a storytelling regulatory culture, success stories should not be restricted to good things tax officers do; they should include stories of best practice among large business, such as corporate compliance systems and governance processes put in place by corporates. This can be institutionalised by nurturing tax compliance professionalism in the way the Australian Competition and Consumer Commission has done with Trade Practices professionalism (through establishing the Association of Compliance Professionals in Australia) and consumer affairs (through initiating the Society of Consumer Affairs Professionals in Business).
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  • Fall '16
  • tax authority, Australian Taxation Office, Tax Office, Compliance Model

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