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  • Compliance model

    The compliance model is a structured way of understanding and improving client compliance. It helps us to understand the factors that influence client behaviour and to apply the most appropriate compliance strategy.

    Client behaviour is influenced by business, industry, technology and data, sociological, economic and psychological factors.

    The compliance model shows a continuum of client attitudes towards compliance. At the base of the continuum, clients have the desired attitude of being 'willing to do the right thing'. At the other extreme, clients have decided not to comply – choosing to evade or opt out of the tax system.

    The compliance model also summarises the different sorts of support and intervention that we may need to provide to collect the required revenue. The model suggests that the ATO has the ability to influence client behaviour through our response and interaction.

    Compliance model

    The compliance model is represented by a pyramid with four horizontal slices. 
The base, and largest slice, of the pyramid represents the large number of clients who are willing to do the right thing. Our corresponding strategy is to make it easy for these clients to comply.
The next higher slice represents clients who try to do the right thing, but don’t always succeed. Our corresponding strategy is to use the data and support services we have to make it easy for these clients to comply and hard not to. 
The next slice up represents clients who don’t want to comply. Our strategy is to detect and deter non-compliance through the use of improved data and technology. 
The top, and smallest, slice represents those who have decided not to comply, evading or opting out of the tax system. Our corresponding compliance strategy is to use the full force of the law against these clients.
The compliance strategy costs are lowest for  clients that are willing to comply and highest for actively non-compliant clients. 
Our compliance response to each identified client attitude acts to help them move into lower, more compliant, slices of the pyramid.

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    Last modified: 11 Apr 2019QC 33765