Australian Tax Forum
Australian Tax Forum is a prestigious quarterly journal with the objective of providing discussion on issues in tax policy, law and reform amongst tax professionals. It is an essential reference source for understanding and contributing to the development of taxation systems worldwide. Australian Tax Forum is aimed at those who want to influence the future development of tax policy. It is an important journal for tax policy makers, academics and libraries.
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Articles from the current issue:
Evaluation of corporate income tax compliance costs under the Malaysian self-assessment system Add to cart
01 Apr 2014
This paper presents the findings of the first study carried out in 2010 on the compliance costs of Malaysian corporate taxpayers under the self-assessment system (SAS) environment. We used a self-administered survey method on 473 large companies and received 98 usable responses, which represented a response rate of 20.7%. The mean compliance costs estimate of a company for the year of assessment 2009 is MYR47,126 (AUD15,340), accounting for approximately 1% of sales turnover. The mean estimate from this study is 31.5% lower when compared to the findings of a similar Malaysian pre-SAS study. The components of compliance costs are segregated into internal and external costs (37% and 63%, respectively), and computational and planning costs (74% and 26%, respectively).
The aggregated total compliance costs are almost MYR32 million, representing 0.11% of corporate tax revenue and 0.01% of Malaysian gross domestic product (GDP). The magnitude of the corporate income tax (CIT) compliance costs estimate is low compared to similar estimates in other advanced and emerging economies, partly portraying a lower level of complexity in the Malaysian tax system. The costs of seeking tax incentive and psychological costs comprise approximately 7% and 18%, respectively, of the mean tax compliance costs incurred by large corporations. The normal regressivity of tax compliance costs, in relation to company size, is evident and corroborates the findings of existing studies on the unfair compliance costs burden imposed on smaller corporations.
This study provides useful information to tax authorities and others concerned with establishing guidelines and tax policy pertaining to the compliance
costs burden of taxpayers.
Why the tax compliance costs of large companies in Indonesia are low compared to other countries: Empirical evidence Add to cart
01 Apr 2014
This article argues that the magnitude of tax compliance costs in one country compared with those in other countries does not necessarily reflect the relative complexity of the tax system. Specifically, the low compliance costs for large corporate taxpayers in Indonesia compared with those in both developed and developing countries do not imply that the tax system in Indonesia is less complex than that in those countries. Rather, it is the relative size of the companies and the low wage rates in Indonesia that influence the tax compliance costs more than the complexity of the tax system itself. The difficulties in making international comparisons of tax systems are fully recognised.
A uniform land tax in Australia: What is the potential for this to be a reality post the ‘Henry Tax Review’? Add to cart
01 Apr 2014
Land tax was one of the main issues examined by Dr Ken Henry in his review on ‘Australia’s Future Tax System’ and the review recommended its increased importance in raising revenue in Australia. The classical economists such as Smith, Ricardo and Mill recommended the imposition of a tax on land. Henry George also strongly advocated a tax on land instead of a tax on labour or capital. They also contended that such a tax was both efficient and equitable. This paper will examine the current position with land tax in Australia and the views of the early economists advocating the benefits of such a tax. The paper will then examine the recommendations contained in the Henry Tax Review and what would be required to reform this area of taxation law.
The paper will also examine the initiative undertaken by the Australian Capital Territory (ACT) government in abolishing stamp duty on conveyances and imposing a land tax on all real property in the ACT. In conclusion the paper will contend that a reformed land tax is of critical importance for future governments and that it may not only raise considerable revenue but also result in reduced income tax rates for individuals and companies.
01 Apr 2014
The combination of the need for new revenue sources and the simplification of the tax system has seen all personal income tax relief mechanisms, and not just deductions, come under increased scrutiny. However, what constitutes a relief is in practice complex because similar benefits can be delivered through a multitude of different approaches. This paper highlights that a holistic approach to the successful reform of tax relief arrangements has three important requirements.
Firstly, the need for a clear understanding of how different mechanisms are utilised to deliver equivalent tax relief outcomes; secondly, the availability of a taxonomic framework capable of enabling different tax relief systems to be assessed; and thirdly, a framework for presenting (and communicating) the impact of reliefs (and any reforms) simply and transparently. Having developed such an approach, the paper applies it to a review of tax relief reforms proposed and implemented in Australia, NZ, UK and US over the past two years. It is contended that in all cases the reform process would have benefited from directly addressing the three requirements outlined in this paper as crucial precursors to any move to reform tax reliefs.
01 Apr 2014
A questionnaire postal survey of 351 Australian emitting entities was undertaken in April/May 2013, sent to each entity’s Chief Financial Officer, with 27 usable responses. The main finding is that Australia’s carbon pricing scheme in 2012-13 imposed overall (indicative) mean tax compliance costs of (around) $456,000, composed of start-up costs of $402,000 (88 per cent) and recurrent costs of $54,000 (12 per cent). The tax compliance costs of Australian carbon pricing, including in terms of pertinent factors (such as per liable emitting site, tax paid and hypothetical ‘compensation’) and basic entity characteristics (such as legal entity, location and size), are analysed and discussed. Expressed on a per liable emitting site basis and subject to certain caveats, the Australian estimates of the compliance costs of carbon pricing are broadly comparable to those in Germany, the only country for which comparable data is available. A comparison of the main findings of this research in terms of previous tax compliance costs studies worldwide is undertaken.
This article should be seen as an initial step towards a better understanding of carbon pricing compliance costs that have been neglected by governments and researchers worldwide to date.
01 Apr 2014
This article reports on the tax compliance burden of Australian personal (non-business) taxpayers in the 2011−-12 tax year. A survey of just over 4,000 individuals was conducted in late 2012 and average tax compliance costs were derived from the data and combined with macro-statistics to generate aggregate personal taxpayer compliance costs. The study demonstrates that personal taxpayer compliance costs have grown by about 73 per cent since 1995 and suggests that various technologically driven simplification initiatives undertaken by the government (such as e-tax and pre-filled income tax returns) have not been sufficient to slow down this growth in personal tax compliance costs.