Traditionally, tax administrations have used taxpayer audit program resources
principally to deter deliberate noncompliance, 'encourage' due care in the
exercise of tax obligations, and recoup otherwise forgone Revenue.
Usually, a corresponding perspective has been adopted by those policy analysts
concerned with identifying and modelling the 'optimal' design characteristics
of taxpayer audit programs. But, in the process, they have presumed that tax
administrations make no efforts to learn from the results of taxpayer audits.
Equally, most policy analysts have presumed that taxpayer audit programs can
play no part in tax administrations' efforts to improve the underlying
willingness and ability of taxpayers to comply with their tax obligations.
One important adverse consequence of these presumptions has been that the
taxpayer compliance behavior literature has paid very little attention to the
major policy issue of how tax administrations should go about allocating their
taxpayer audit program resources so as to best manage what the candidate has
termed the risks to the Revenue. These risks are defined to be those which stem
from the lack of information available to tax administrations about both deliberate
and inadvertent noncompliance by taxpayers.
In the empirical part of the taxpayer compliance behavior literature it is now
well-appreciated that both the nature and the degree of taxpayer noncompliance
can vary considerably across different categories (populations) of taxpayers.
Thus the 'risks to the Revenue' can likewise vary considerably across taxpayer
populations. In turn, different taxpayer populations may well require different
program 'treatments'. Accordingly, it is now being recognised in the empirical
literature that much more attention needs to be paid to the types of information
tax administrations require about taxpayer noncompliance so as to better
perform their central role.
It is already widely agreed by policy analysts that a tax administration's central
role is a broad one, and that it entails ensuring, as far as is practicable and
socially desirable, all taxpayers pay the correct amounts of tax - preferably
voluntarily. However, a tax administration's performance in this regard has to
be assessed largely on the results obtained from taxpayer audit programs.
There is therefore a need for a new conceptualisation (model) of what might
constitute an 'optimal' taxpayer audit program, and which better captures both
the various aspects of taxpayer noncompliance and the information
requirements of tax administrations.
The need for such a model has now become an urgent one. This is especially
because a number of tax administrations, including the Australian Taxation
Office, are no longer seeking to use taxpayer audit program resources
principally in the traditional deterrence, 'encouragement' and Revenue-recovery
mode. Instead, these resources are increasingly being used to help identify
those taxpayer populations, as distinct from individual noncompliant taxpayers,
which represent the greatest 'risks to the Revenue'. In turn, the results from
taxpayer audits conducted in the 'high risk' populations are being used to help
the tax administration determine the most appropriate strategies for improving
future compliance in these populations.
It will be argued in this thesis that the capture of these important strategic
characteristics of modern taxpayer audit programs cannot be achieved by
augmenting the existing deterrence-based models. A complementary model,
more suitable for wider policy analysis, is therefore developed which can
readily encompass these characteristics. This model is based on the construct of
a budget-constrained tax administration seeking to manage the risks to the
Revenue in (what is described in the organizational literature as) a Learning
Organization environment, and where market segmentation techniques are drawn
on when making inter-population resource allocation decisions.
The policy value of this model is then demonstrated by applying it to both
quantitative and qualitative data compiled by the candidate for the Business
Audit Program of the Australian Taxation Office. In the process, a number of
separate, substantive contributions are made to the program monitoring,
program evaluation and taxpayer compliance behavior literatures.
Collectively, these contributions provide support for the central argument of
this thesis that both taxpayer compliance behavior researchers and policy
analysts now need to pay much more attention to the information-gathering and
strategic resource allocation challenges confronting tax administrations. The
policy issues arising here, it will be argued, go to the heart of what constitutes
successful and accountable tax administration, and (in turn) a 'high integrity'
tax regime which is both efficient and equitable.
| Identifer | oai:union.ndltd.org:ADTP/219506 |
| Date | January 1995 |
| Creators | Wickerson, John, n/a |
| Publisher | University of Canberra. Law |
| Source Sets | Australiasian Digital Theses Program |
| Language | English |
| Detected Language | English |
| Rights | ), Copyright John Wickerson |
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