Centre for Tax System Integrity
Research Projects and Surveys
Responses of Small and Medium-sized Business to Tax Compliance
The ATO Compliance Model was developed initially with the Cash Economy Task Force as a procedural model for the management of non-compliance and as a means of improving cooperation between the business sector and the Tax Office.
The model assumed that interactions with non-compliant businesses would as likely as not be intrusive and impose compliance costs on business. In order to respect taxpayers' rights and not hamper business efficiency, the idea was to give taxpayers an opportunity to explain and correct anomalies in their taxation records before progressing to higher levels of intrusiveness (for example, full audits). The model rested on the supposition that low levels of intervention could improve compliance behaviour and it was only necessary to be more interventionist if the taxpayer failed to provide a satisfactory account of their activities or were unwilling to cooperate with enquiries (see pdf version of Braithwaite, V. & Braithwaite, J., An evolving compliance model for tax enforcement. In N. Shover & J.P. Wright (eds), Crimes of Privilege, Oxford University Press, New York & Oxford, 2001.
The success of the model with small and medium-sized business has been evaluated through qualitative and quantitative studies. The industry focussed studies have been in building and construction, and the used car sales industry. Another study has involved interviews with large and medium-sized businesses from a variety of industries.
Professor Neal Shover, Univesity of Tennessee
Harris, N. & McCrae, J.
Shover, N., Job, J. & Carroll, A.
Rawlings, G. Ahmed, E. & Braithwaite, V. © Centre for Tax System Integrity
Ahmed, E. & Braithwaite, V.
© Centre for Tax System Integrity