Tax law provides the rules that determine taxpayer obligations and the

Tax law provides the rules that determine taxpayer

This preview shows page 283 - 284 out of 311 pages.

the Australian democracy, tax law. Tax law provides the rules that determine taxpayer obligations and the enforcement capabilities of tax officers. In most areas of this large body of law, it is difficult to find principles or guidelines that provide a meaningful template for making sense of these rules, and linking them to the other components of the system (Braithwaite, 2002). Furthermore, there is no evidence of a shared understanding between citizens and their elected representatives about how and why these rules evolve as they do (Ralph Report, 1999). In addition to the rules derived from tax law and ATO rulings, there are rules entrenched in the administrative system that define the work roles of staff, the reward structures of the organisation, record keeping and data storage capacities, and the reasons for and methods of communicating with taxpayers. Communication revolves around an elaborate system of automatically generated letters to taxpayers to inform them of their obligations, to query their actions, to deliver refunds and payments, to communicate failure to comply, and to impose penalties, all of which have an institutional history of their own. These legal and administrative rules, some formal and some informal, are the centrepiece of operations for the Australian Taxation Office, and for the most part predate overarching objectives, the Taxpayers’ Charter and the ATO Compliance Model. One might postulate that in a large bureaucracy, such as a tax authority, practices are more likely to flow from the institutionalised formal and informal rules, and less likely to flow from semi-detached blue prints introduced relatively recently in the history of the organisation to give it greater legitimacy in the eyes of the public. This means that the main challenge for a tax authority seeking institutional integrity is to convert democratically responsive principles of action into concrete operations and routines in the day-to-day practices of tax officers. This is the same challenge faced by corporations seeking regulatory integrity through turning their regulatory blueprints into meaningful practices (Parker, 2002). One of the central propositions of this chapter is that just as regulators look for substantive compliance in the actions of those they regulate, citizens look for substantive integrity in the authorities that seek to direct their actions. The integrity that taxpayers observe in the tax system and its administration may not be the same as the integrity that tax officers see from within. When integrity is perceived to exist in the system by tax officials and those who are experts in its operation, it may be claimed that the system has passed the test of internal integrity. In the eyes of those who know the system well, the components are connected in such a way that high performance in one part enhances, or at least does not detract from performance in other parts, the overall purpose is sound, and the organisation is responsive, able to evolve to meet community needs. A system that is supported by a democracy, however, has to be accountable to the electorate.
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  • Fall '16
  • tax authority, Australian Taxation Office, Tax Office, Compliance Model

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