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  • Research results: GST benchmarking survey (2011–2016)

    As part of our efforts to gain insights from the community, under the GST Voluntary Compliance Program, we commissioned TNS Social Research to conduct a six-year program of research to understand the attributes and behaviours that drive compliance (or non-compliance) with GST obligations. The survey aims to support the development of voluntary compliance program strategies, to evaluate taxpayer behavioural change and to measure the impact of current communications and guide future communication activities. The research has two components – quantitative and qualitative. The research for the sixth phase of the program was completed in July 2016.

    We have gained some interesting insights into perceptions around the fairness of the tax system and the system in operation. Since the research began, the attitudes and beliefs towards the whole of the GST system have become more positive. The 2016 results continue to reveal some encouraging changes in the propensity of businesses to meet their GST obligations, demonstrating a number of positive shifts in the level of both intentional and deliberate non-compliance activity. Consistent across the six years of tracking, non-compliance remains largely inadvertent, generally reflective of administrative challenges, poor planning, general mismanagement and uncertainty.

    The 2016 results reflect:

    • An increase in overall confidence to always fulfil GST obligations (up from 80% in 2015 to 85% in 2016) and marks the highest level of the tracking period.
    • The propensity for businesses to make errors in their BAS in 2016 has steadily decreased over the 6 year tracking period. The proportion of businesses reporting that they had made an error is significantly lower than at the 2011 benchmark (76% had ‘never’ made an error in 2016 vs 74% in 2015 and 68% in 2011).
    • The attitudes and beliefs towards the whole of the GST system have fallen in 2016. 67% of respondents now believe that the GST is a fair tax (compared with 71% in 2015) and less respondents believe that meeting GST requirements actually helps keep track of their business performance (62% in 2016 compared to 70% in 2015)
    • There has been a reversal in the belief that penalties for failing to meet GST requirements are too harsh (30% in 2016, down from 40% in 2015).
    • More than half of the respondents still believe that the GST is an extra burden on their business (58%) and by collecting GST they are doing the ATO’s job (63%), however attitudes against both of these indicators have shown slight incremental improvements over the six years.
    • The perceived ease at which GST obligations can be met by businesses has declined. Only 78% of businesses believe it is easy to register for GST down from 86% in 2015.
    • There has been a decline in the percentage of respondents who believe that getting their BAS in on time is important, even if they may make some mistakes on it (from 60% in 2015 to 53% in 2016). This could be linked to the decreased belief that the penalties for not lodging on time are worse than the penalties for making mistakes on the BAS.
    • With regards to payment of GST, 41% of respondents still believe it is ok to pay their GST debt late, as long as it gets paid – this has remained consistent over the span of research.
    • There was a reversal of the trend in the beliefs that businesses use the cash economy to avoid meeting their GST obligations in 2016. Less of this year’s respondents believe that it is normal for tradies to offer discount for cash payment (31%), for businesses to use GST funds to manage their cash flow (45%), a decline in the view that cash in hand payments do no harm to anyone (13% in 2016 down from 18% in 2015).
    • The importance of tax or BAS agents to make it easier to meet GST requirements (76% in 2016 compared to 67% in 2014).

    We continue to explore ways to help small businesses comply with their GST obligations, including removing some of the BAS labels (as featured under Meeting out goals), and in doing so, simplify and reduce record keeping challenges. We will also undertake further analysis to understand the drivers of why some indicators had a statistically significant reversal in their trends, and any subsequent action required by the ATO to mitigate these issues.

    Each survey is based on a representative sample of 800 businesses (the majority of which are small businesses) in scope for GST and the survey is structured so that it has a 95% confidence level and a 3.5% margin of error (plus or minus).

      Last modified: 20 Apr 2017QC 51810