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Towards a holistic analysis of personal income tax reliefs and their reform


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.

Author profile

Neil Warren
Neil is a Professor, School of Taxation & Business Law, UNSW Australia.
  • Current at 1 October 2016
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