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  • Cost of compliance



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    This chapter provides information on time-based cost of compliance data as reported on the major tax forms used by individuals and businesses. This includes the income tax returns for individuals, companies, trusts and partnerships; business activity statements (quarterly only) and the fringe benefits tax return. Data is extracted from the time-box label that is included on these forms. Taxpayers my use the time-box to record their estimate of the total time to complete the form in addition to time required for compilation of relevant information and record keeping.

    The time-box label was introduced in the late 1990s and was required to be placed on all government forms that a business was required to complete. Recently, this mandatory element was removed, although key forms such as the business activity statement and tax return continue to use the time-box label.

    There are two time-box labels:

    • for simple forms, the label asks taxpayers to estimate the time taken to complete the form (in hours), and
    • for complex forms, the label asks people to estimate the time taken to prepare for and complete the form (this label is used on the business activity statement and income tax return forms).

    It is not compulsory for taxpayers to complete the time-box. As a result, the percentage of forms with this label completed is generally low. For example, the business activity statement forms generally have a completion percentage from 25% to 33%, but some forms have a much lower rate than this - between 5% and 10%.


    For the 2007-08 financial year:

    • the average time taken to complete an income tax return was 5.9 hours
    • the average time taken to complete a business activity statement was 2.0 hours
    • it took an average of 12.4 hours to complete a fringe benefits tax return, and
    • the average cost of managing tax affairs for an individual was $268.20.
      Last modified: 18 Mar 2009QC 21490