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Managing tax system complexity: Building bridges through pre-filled tax returns

Published on 01 Jul 10 by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE

Despite being consistently stated as an important characteristic of good tax policy, tax simplicity has largely been ignored in actual tax reform. After so many years and attempts, the goal of tax simplification in Australia appears to be as elusive as ever. The central tenets of this paper are that tax policy simplification is virtually not possible and that tax law simplification has limited benefits. In practice, therefore, it is argued that reduced tax complexity can be achieved mainly through administrative (or procedural) simplification. The paper then focuses on pre-filled income tax returns in Australia as a recent example of administrative simplification. We perceive pre-filling as the government’s attempt to build a further bridge between the Australian Taxation Office (ATO) and individual taxpayers, adding to the existing bridges between the ATO and taxpayers and tax practitioners. It is concluded that, at this early stage, the reactive and partial model in use in Australia (compared to Nordic and other initiatives) is a step in the right direction but has not yet led to significant operating cost savings. This may change if the recommendations of the Henry Review are fully accepted and implemented, possibly smoothing the pathway to total automation of tax return preparation.

Author profiles:

Author Photo - Christopher Evans
Prof Christopher Evans
Chris is a Professor, School of Taxation & Business Law, UNSW Australia, Extraordinary Professor, Department of Taxation, University of Pretoria, and Senior Research Fellow, Tax Law and Policy Research Group, Monash University. Current at 01 October 2016 Click here to expand/collapse more articles by Chris EVANS.
 
Binh Tran-Nam
Binh is a Professor, School of Taxation & Business Law, UNSW Australia and RMIT Asia Graduate Centre, RMIT University Vietnam, and International Fellow, Tax Administration Research Centre, Exeter University-Institute for Fiscal Studies. Current at 03 November 2016 Click here to expand/collapse more articles by Binh TRAN-NAM.
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