Tax Compliance Costs: Research Methodology and Empirical Evidence from Australia

TLDR

Tax compliance costs remain a key concern across the OECD, and in Australia they are especially salient amid major tax reforms, prompting an ongoing federal study by the ATAX team at UNSW. The paper aims to describe the methodology for estimating federal tax compliance costs and to present aggregate empirical findings from large‑scale mail surveys of over 10,000 taxpayers. The study employs a methodology that estimates compliance costs through analysis of large‑scale mail survey data from personal and business taxpayers. The empirical results reveal substantial differences between Australian and U.S.

Abstract

The issue of tax compliance costs continues to attract public attention throughout the OECD. This is particularly true in Australia, where major tax reforms are taking place. This paper reports on an ongoing research project on federal tax compliance costs conducted by a research team from the Australian Taxation Studies Program (ATAX) of the University of New South Wales. The focus of this paper is on the methodology of estimating taxation compliance costs. Some aggregate empirical findings, based on several large-scale mail surveys of over 10,000 personal and business taxpayers, will be reported. Major differences between the Australian and U.S. tax systems, as well as comparison with results obtained in previous UK and U.S. studies, will also be highlighted.