It is not surprising that tax officers regard compliance in this context as a

It is not surprising that tax officers regard

This preview shows page 289 - 291 out of 311 pages.

administrators. It is not surprising that tax officers regard compliance in this context as a question of the taxpayer not showing due care; a problem that is most times dealt with through the application of appropriate penalties to impress upon taxpayers the need to give tax matters their most serious attention in the future. The above discussion illustrates how understanding and improving compliance requires a tax authority to entertain multiple conceptions of compliance and to be able to change the frame of analysis for a compliance problem as attention moves from one area to another, that is, from personal income tax, to large corporate tax, to small business, to the cash economy, for example. For this reason, the question of finding strategies to improve compliance is one that, in the first instance, is best answered at the local level. Field operatives have the intelligence to analyse compliance problems in terms of the request and action framework provided in Figure 13.1; and furthermore, they have the experiential base for compiling a rich array of creative and workable interventions to deal with the problems they have observed. For tax administrations that are risk averse and that traditionally operate within hierarchical structures, devolving problem solving to local areas is a radical
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280 Taxing Democracy proposal (Job and Honaker, Chapter 6, this volume). Yet, as Sparrow (2000) has pointed out, tax administrations have started to grapple with this challenge and have produced evidence that institutional change is possible. Through setting up special purpose task forces that draw on the local knowledge of field staff and bring together an effective skill mix from different sources, strategies for improving compliance in relation to specific problems have been found. Improvements in compliance are among the major yardsticks used by tax authorities and their governments to assess their performance. Commonly, compliance gains are considered against compliance costs, which refer to the financial and opportunity costs of compliance borne by taxpayers and tax officers. But there also may be a cost to the integrity of the tax system. Compliance gains may mean integrity loss, at least in the view of the public. To understand the compliance integrity trade-off, consider the following example, one that is currently eating away at the hearts and minds of ordinary Australians (see Braithwaite, Reinhart, Mearns and Graham, 2001). While tax officers dealing with personal income tax scrutinize data sets to identify irregularities in self-assessed tax returns, tax officers dealing with large corporates and high wealth individuals work to establish cooperative relationships with their clientele in order to collect at least some tax from those who have the capacity to avoid paying any tax at all (Australian Taxation Office, 2000b). From a local compliance perspective, both components of the system, that is the personal tax and large business lines, work well in achieving their goals. For personal tax, data matching software increases the revenue collected at minimal cost to the tax office.
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  • Fall '16
  • tax authority, Australian Taxation Office, Tax Office, Compliance Model

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