The impact of income tax complexity on practitioners in Australia
Source: Australian Tax Forum Journal Article
Published Date: 1 Oct 2005
The Australian income tax system is based on self-assessment and is undoubtedly complex. In terms of meeting their income tax compliance obligations, Australians are heavily dependent on tax agents, more so than taxpayers in any other country in the world. This is mainly due to the fact that most Australian income taxpayers want an accurate return and that they think that the system is too complex for them to ever understand, or just not worth their while spending the time to do so. It follows that the burden of (or opportunity provided by) tax complexity falls on tax agents who are at the coalface in advising their clients. What are the causes of complexity for tax agents? What is the relative importance of these causes? How do they impact on tax agents’ practices? How has this changed over time? From the perspective of tax agents, is there a need to reduce income tax complexity, and if so, how can it be achieved?
These questions are addressed by a multi-paradigm research design using an electronic survey of tax agents and a case study. Briefly, the findings of the research are that agents are overwhelmed by the volume of tax material of which they need to keep abreast, not just legislation, but rulings determinations and practice statements issued by the Australian Taxation Office (ATO). To a lesser extent, the rate of change is an issue as is the complexity of the law. Agents’ job satisfaction is suffering as is their confidence in their technical ability. They are coping in a variety of ways including by undertaking additional technical research without always passing on the costs to clients; by narrowing the scope of their activities, or by relying on the advice of technical experts (which has implications for compliance costs). Tax agents feel frustrated with government and the ATO. There is a need for more simple, integrated and efficient tax systems with less regulatory material and less ad hoc change – and agents want to have more input into the process.
Sorry, this is subscriber only content.
To gain access to this material and much more - Subscribe Now.
(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).
Already a Subscriber? Login now
Already a Subscriber? Login now
Details
- Published By: Margaret Mckerchar
- Published On:1 Oct 2005
The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.
Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.
The Tax Institute
(ABN 45 008 392 372 (PRV14016))
("TTI")
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
Copyright Statement
All materials provided on this site are protected by copyright and are owned by or licensed to TTI.
Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.
Tags
Share this page