GST voluntary compliance program – Research phase 5 (2015)
In 2011 the ATO commissioned independent research company, TNS Social Research (TNS), to undertake a yearly program of research over a five-year period to:
- Understand and track the attitudes and behaviours driving compliance (or non-compliance) with GST obligations, and
- Support the GST voluntary compliance program, which aims to deter fraud and evasion, and help people understand the heightened risks which accompany deliberate non-compliance.
In 2015, as part of phase five of the research program, TNS undertook research focusing on two components:
- Qualitative research focusing on GST and tax evasion, identity theft and attitudes and behaviour towards GST fraud, and
- Quantitative research to test against benchmark indicators and to evaluate drivers of behavioural and attitudinal change in taxpayers.
Attitudes and compliance behaviour relating to the GST system
- Overarching attitudes and beliefs towards the whole of the GST system have become more positive since the research program began in 2011
- Shifts in our communication channel strategy have been noted by businesses, with a sharp increase in the number of taxpayers receiving a text message from us in 2015, compared to a significant decline in those who received printed material. The effectiveness of the text message service is viewed very positively
- Perceptions of the existence of red tape and burden have declined significantly for the first time since 2011, although two-thirds of those surveyed still think red tape exists
- The perceived ease for businesses in meeting their GST obligations continues to improve. More business believe it is easy to register for GST, easy to know what they can and can’t claim GST on and that it is less likely they will make mistakes on their BAS
- There has been a spike 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. This is linked to the increased belief that penalties for not lodging on time are worse than penalties for making mistakes on the BAS, and
- On the other hand, there was a reversal of the positive trends around the use of cash transactions to reduce the amount of GST businesses have to pay. More businesses believe that it’s normal for ‘tradies’ to offer a discount for cash payment, and that very few businesses are likely to record all cash transactions on their BAS.
Drivers of behaviour and attitudinal changes
- Overall, there remains a high level of perceived legitimacy and morality towards GST compliance, and many businesses are successful in complying with their GST obligations, guided by tools, systems and, in many cases, support from intermediaries
- However, there remains a fairly common belief that mistakes are inevitable and compliance may be challenged by burden and pressure, business situations, cash-flow management, and transactions ‘under the radar’ in the cash economy
- The main barriers to compliance have remained largely consistent – it is seen as an administrative burden to comply, confidence in completing the BAS accurately remains low and there is a sense of hostility related to the role played by businesses in the collection of GST more generally, and
- There appears to be an entrenched attitude that ‘it’s ok to pay your GST late, as long as you pay it’, and this belief is proving difficult to change.
Attitudes and perceptions of GST fraud
- There is a belief among some small business owners that not all instances of tax evasion should be considered as fraud. Also, there is a perception that ignorance is an acceptable defence against tax evasion
- While the business and wider community have a level of awareness of how identity theft could affect individuals, there is little understanding about how a stolen identity might be used in a business context
- It is recognised that fraud has the potential to create inequity in the business environment and could lead to wider issues at a governmental level, and
- It is seen as the role of the ATO to identify fraud and to provide appropriate deterrents through the threat of audit, penalties and prosecution.
How the research will be used
The research findings and insights will be used to:
- Track and evaluate our compliance effectiveness measures and the progress of the program against the benchmarks established at the beginning of the research, in 2011
- Uncover and examine behaviours, drivers and attitudes of taxpayers and their involvement in the GST system, and
- Guide and inform the direction of our communication strategies, and the content of messages and channels used to support the GST voluntary compliance program.
Find out more:
Contact the Corporate Research Centre for further information.
In 2011 the ATO commissioned independent research company, TNS Social Research, to undertake a yearly program of research over a five-year period to understand and track the attitudes and behaviours driving compliance (or non-compliance) with GST obligations, and support the GST voluntary compliance program.