Large Business and the Compliance Model

Abstract

In April 1998 the Cash Economy Task Force (1998) produced an influential Australian report entitled Improving Tax Compliance in the Cash Economy. Improving Tax Compliance in the Cash Economy proposed a new Compliance Model for the Australian Taxation Office (ATO) with four elements: (a) understanding taxpayer behaviour; (b) building community partnerships; (c) increased flexibility in ATO operations to encourage and support compliance; and (d) more and escalating regulatory options to enforce compliance. During late 1998 and early 1999, the question was asked whether or not the Cash Economy Compliance Model was relevant to tax compliance for the large business market segment. At the time there were doubts. This chapter opens up some issues for consideration about applying the model to the ATO’s compliance work on large business. Preliminary examination revealed that the four elements of the model mentioned above all have relevance to large business, though a different kind of relevance than in the case of the cash economy. This chapter is structured around considering each of these elements in turn. The spirit of the chapter is to identify a number of policy ideas that might give meaningful content to the model in the large business context.