Integrity: The Key Stone to Good Tax Administration

Abstract

This paper argues that corruption has a corrosive impact on the well-being of a nation, and is especially damaging to tax administrations. The paper compares descriptively the contrasting fortunes of countries that are perceived to be afflicted by substantially different levels of corruption, with particular reference to South Africa and Australia. This is done to support efforts in South Africa to reduce perceived levels of corruption. The paper explores the causes of corruption both from the perspective of the design of tax systems and from the perspective of tax administrations. It outlines a range of generic remedies that can be used to minimize the risk of corruption. In giving life to these generic remedies the paper follows the approach taken by the Australian Taxation Office to reinvigorate its integrity framework as a result of the improper conduct of an assistant commissioner (Petroulias) in the late 1990s.