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


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 Professor of Taxation and former Head of the Australian School of Taxation (Atax) at UNSW Australia. He specialises in comparative taxation, capital and wealth taxation, tax law and administration, tax policy and reform. His PhD from UNSW was a comparative study of the operating costs of taxing capital gains. He also holds a master’s degree in European Political Integration from Leicester University and a Bachelor’s honours degree in Economics from London University, as well as postgraduate educational qualifications from Leeds University. He has researched and published extensively in taxation, and is a co-author of Australian Taxation Law and Cooper & Evans on CGT. He is General Editor of Australian Tax Review and Editorial Board member of other journals. He has served on a number of governmental and professional body committees and working parties in Australia and overseas, including the UK’s Mirrlees Committee and the HMRC International Panel on tax administration. Current at 04 July 2014 Click here to expand/collapse more articles by Chris EVANS.
Binh is an Associate Professor, School of Taxation and Business Law, UNSW and Senior Fellow, Taxation Law and Policy Research Institute, Monash University.
Current at 01 May 2014
Click here to expand/collapse more articles by Binh TRAN-NAM.
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