Centre for Tax System Integrity

Research Projects and Surveys

From Cash Economy to Serious Non-compliance

The ideas that have been central to the work of the centre first gained recognition in the Australian tax context through the 1998 Cash Economy Task Force Report. It was this group of representatives from the business community, non-government organizations, the Australian Taxation Office and academia (Valerie Braithwaite was a member of the task force) that first began to question the effectiveness of using sanctions in the form of fines and penalties to deter people from evading tax. Moreover, the task force was sensitive to the different levels of tax evasion that were present in the community, particularly in relation to cash economy.

Designing a deterrence system that is effective in preventing repeated evasion as well as an increase in the incidence of evasion depends on a number of factors. Tax administrators must take account of the seriousness of the offence, the tax office's enforcement practices, and the taxpayers' awareness and acceptance of legal obligations. All of these considerations must be balanced within an overarching framework of reasonableness, fairness and justice.

Several of the CTSI staff have been engaged in work that aims to inform tax administrators of the ways in which different people make sense of the tax office's efforts to deter in different contexts. In particular, attention has focused on Australians' participation in the cash economy and on those who have had conflict with the tax office.

Using the CHFAS and ATSFONS survey data, analyses have been carried out to understand how well deterrence works in the cash economy and more generally, in relation to misrepresenting income or deductions in tax returns.

Interviews have also been conducted with those convicted of serious tax evasion to find out how they look upon the sanctions that have come into play since their conviction and how these sanctions are likely to deter them in the future.

Chief Investigators

Dr Tina Murphy
Dr Declan Roach
Dr Valerie Braithwaite
Mrs Monika Reinhart

Data Sets

The Community Hopes, Fears and Actions Survey (CHFAS)

  • Survey method, sample representativeness and data quality
    (pdf version)

The Australian Tax System - Fair or Not Survey (ATSFONS)

In-depth interviews with non-compliant taxpayers

Key Publications

Braithwaite, V., Schneider, F., Reinhart, M. & Murphy, K.
Charting the shoals of the cash economy. In V. Braithwaite (ed) Taxing Democracy: Understanding Tax Avoidance and Tax Evasion. Ashgate, Aldershot, 2003: 93-110.
(pdf version)

Murphy, K.
Aggressive tax planning: Differentiating those playing the game from those who don't, Journal of Economic Psychology 25 2004: 307-329.
(pdf version)

Murphy, K.
Procedural justice and tax compliance, Australian Journal of Social Issues 38(3) 2003: 379-408.
(pdf version)

Wenzel, M.
The social side of sanctions: Personal and social norms as moderators of deterrence, Law and Human Behaviour 28 2004: 547-567.
(pdf version)

Roche, D.
Firm and Fair Regulatory Enforcement? RegNet Occasional Paper No 9, Regulatory Institutions Network, Australian National University, 2006.
(pdf version)



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