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The Taylor Report: A report on measures to combat rising compliance costs through reducing tax law complexity

Publication date: 22 Jun 06 | Source: THE TAX INSTITUTE

Australia's Income Tax Assessment Acts are at risk of collapsing under the weight of their own complexity. Recognising the need to redress this complexity, the Taxation Institute of Australia is today releasing a significant, independent report that calls for further crucial reform to our tax laws. The report successfully builds on the recent project by the Board of Taxation to identify inoperative provisions in our tax laws.

“In adopting the Board’s recommendations, the Government has moved to sweep a lot of the deadwood from our tax legislation. Of course, this is but a first step and the Taxation Institute has recognised an opportunity to go beyond the boundaries of this initial clean up.

“Our report, entitled "Beyond 4100" and written by Professor C. John Taylor, makes significant new recommendations for improved, targeted reform that will further simplify our tax laws and reduce the current crippling spiral of compliance costs” said Taxation Institute President, Andrew Mills.

The aim of the Taylor Report is to focus on identifying generic causes of complexity in the Australian income tax system and provide specific examples of complexities that may be regarded as being attributable to each generic cause. In doing so, Professor Taylor has developed a series of detailed case studies illustrating the effects of the combination of multiple causes of complexity in the operation of the current income tax rules.

The report’s recommendations are focused in the following four areas:

  • Repeal provisions rendered unnecessary by subsequent developments in the law
  • Repeal or redraft the following provisions whose literal meaning is rarely or never enforced
  • Rationalise rules through the adoption of common or more general rules
  • Recommendations relating to de minimis rules.

These recommendations are intended to impact favourably on compliance cost reduction at no or negligible cost to the Revenue.

“We acknowledge that the scope of the Board’s project was limited and we call upon the Government to embrace our report’s recommendations as part of a broader commitment to make the tax laws more accessible, comprehendible and easier to comply with” said Mr Mills.

Click here to download a copy of the paper.