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Faculty of Law, UNSW
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Tran-Nam, Binh --- "Tax Reform and Tax Simplicity: A New and 'Simpler' Tax System?" [2000] UNSWLawJl 34; (2000) 23(2) UNSW Law Journal 241

TAX REFORM AND TAX SIMPLICITY:
A NEW AND ‘SIMPLER’ TAX SYSTEM[#]

BINH TRAN-NAM[*]

I. INTRODUCTION

It is indeed a privilege to be invited to contribute a paper to this journal’s special issue on the current state of the Australian tax system. The challenge is accordingly large, especially for an economist to write a paper that may be appealing to lawyers. This is because despite the obvious similarities in their rigorous and analytical approaches to taxation, lawyers and economists typically view the subject from different perspectives and consequently utilise different tools of analysis. Tax economists usually try to draw sweeping, mostly quantitative implications from tax policy on the basis of simplifying assumptions. Tax lawyers, on the other hand, tend to focus their qualitative analyses on specific legislation, rulings and cases, often relying on precedents. There are not many tax experts who successfully combine both approaches in their studies.

The theme of my paper is tax reform and tax simplicity. I have chosen this topic for several reasons. First, lawyers, by the nature of their training, have a vested interest in the simplicity or otherwise of tax legislation. A quick glance at the titles of papers presented by legal academics at the last two Australasian Tax Teachers’ Conferences is sufficient to confirm that assertion.[1] Secondly, tax simplicity is one of the few areas that stands to benefit from cross fertilisation across the disciplines of law, psychology and economics. It seems a worthwhile exercise to establish the connection between these different perspectives. Thirdly, the Federal Government has repeatedly stated its commitment to a ‘simpler’ Australian tax system. As the Government’s tax reforms have been gradually taking shape, it is useful to make a preliminary evaluation of the simplification impact of introduced tax reform measures.

The organisation of the remainder of this paper is as follows: Section II presents an overview of the issues relating to tax simplicity and provides a linkage between legal and economic simplicity. Section III discusses simplicity as a criterion of good tax policy. This paper argues that static simplicity is not desirable in a rapidly evolving economy. Sections IV and V examine the simplification impact of the government tax reforms, including the GST, ABN, PAYG and business taxation reform. It is apparent that tax reforms are driven mainly by considerations other than the desire to simplify the tax system. Some concluding remarks are then given in the final section.

II. WHAT IS TAX SIMPLICITY?

A. Definition and Properties

If there were ever to be an agreement between tax academics, it must be that tax simplicity (and hence its mirror image, tax complexity) is itself a complicated notion. Slemrod, for example, identifies four aspects of the complexity of a tax system: predictability, enforceability, difficulty and manipulability.[2] Cooper, on the other hand, points out that tax simplicity contains within it intimations of predictability, proportionality, consistency, compliance, administration, coordination and expression.[3] It is thus clear that simplicity is a multi-facetted concept, which cannot be simultaneously and adequately addressed in a single paper.

To explore the concept further, let us start with a working definition of tax simplicity. A commonly accepted definition of legal simplicity of taxation is the ease by which a body of a tax law can be read and correctly understood and applied to practical situations. Based on that definition, there are some essential requirements for legal simplicity. These include:

Clarity: tax legislation and rulings should be expressed in plain language and developed in a logical manner.

Consistency: tax legislation and rulings should be consistent, both internally and externally, and well coordinated.

Certainty: any particular tax situation covered by the law must give rise to a unique tax liability.

The notion of clarity here is defined in broad enough terms so as to encompass not only the linguistic expression of the legislation but also the organisational scheme and the ‘principles vs rules’ approach adopted by the law drafters. A tax law can be organised on the basis of formal function (eg, the Income Tax Act 1994 (NZ)) or regime-by-regime (Income Tax Assessment Act 1997 (Cth) (“ITAA 1997”)).[4] Many lawyers agree with Prebble’s view that “a regime-by-regime structure appears to be clearly superior to a functional structure from the point of view of comprehensibility by, and ease of use for, users of the Act”.[5] The choice of writing tax legislation from a principles and purpose viewpoint or a precise and detailed viewpoint can also affect its simplicity.[6]

The notion of consistency has several dimensions: internal consistency, coordination and external consistency. Internal consistency means that different parts of the legislation must be mutually consistent. Coordination means that different parts of the tax law should be linked in a plausible manner. External consistency means the legislation does not contradict other tax laws under the same jurisdiction. Another aspect of consistency, elaborated by Cooper,[7] is that the legislation deals with similar issues in the same way, thus avoiding arbitrary distinctions.

From the measurement perspective, the principle of certainty is perhaps the most important single requirement of simplicity. Certainty basically means that a taxpayer’s ‘true’ tax liability can be uniquely determined from a minimal supply of relevant data with reasonable efforts. The key words here are ‘uniqueness’ and ‘reasonable efforts’. A good indicator of the complexity of the income tax law is the variability of tax liabilities advised to the same client by different tax advisers. The term ‘reasonable efforts’ means that the amount of time and costs expended by taxpayers should be proportional to the monetary effects of their tax calculations.

A tax law can be complex in a legal sense because of any combinations of the following:

• it is poorly expressed; or

• it deals with an intrinsically complex concept; or

• it is intended to serve simultaneous, sometimes conflicting purposes; or

• there exists an adversarial tax culture (between taxpayers and tax administrators).

Conversely, a tax law is simple only if:

• it is clearly expressed; and

• it deals with a simple concept; and

• it is primarily intended to raise revenue; and

• the tax culture is cooperative.

Since the first two points are well discussed in the literature, it may be useful to focus on the last two. The tax system is typically intended by the government to serve a number of different objectives, some of which may be contradicting. The use of the tax system as a sociopolitical engineering tool, however well intended, tends to increase its complexity. Krever has argued that misusing the income tax law as a spending vehicle (through tax expenditures) is one of the largest sources of tax complexity in Australia.[8]

Further, the complexity of a tax system is a two-way, interactive process. Any given tax structure can be as simple or as complex as taxpayers want it to be. Utility-maximising individuals and profit-maximising firms will engage in tax planning to minimise their tax burdens and in so doing increase the complexity of the tax system. In this sense, the complexity of the tax system can be viewed as the outcome of a multi-player (taxpayers vs tax administrators), multi-strategy (cooperative or adversarial) game. A complication of this game is that the behaviour of taxpayers is unlikely to be independent (eg, successful tax planning activities by some taxpayers may induce other taxpayers to engage in similar activities). For any given tax law, its equilibrium complexity depends on the tax culture,[9] and ranges from most complex and wasteful outcome (high tax planning, high auditing costs) to least complex and wasteful outcome (low tax planning, low auditing costs).

B. Measurement and Tax Simplification

Since tax simplicity is a multi-facetted concept, it can be measured in different ways:

• how simple is tax legislation written; or

• how simple is the content of the tax legislation; or

• how taxpayers and tax administrators respond to the tax law; or

• how expensive it is to operate the tax?

The first two measures correspond to what can be termed legal simplicity. Although there are some measures of the complexity of a legislation in the linguistic sense (such as the Flesch Readability Index or Cloze testing),[10] none exists for the complexity of legislation in the content sense. From a pragmatic viewpoint, the most meaningful measure of tax simplicity must then be based on the operating costs of the tax (ie, the costs of administering and complying with the tax).[11] This can be thought of as a measure of economic simplicity.

The measurement of economic simplicity emphasises the interaction between the tax law and the economy (as characterised by the population of taxpayers). In shifting from comprehensibility to applicability, it is conceivable that legal simplicity is not always compatible with economic simplicity. This is because different tax laws may affect different populations of taxpayers. For example, while a tax law A is more complex than a comparable tax law B in the legal sense, A may be less costly to operate than B since it affects a smaller number of taxpayers than B.

Another difference between legal and economic simplicity relates to the level of technology. The information technology revolution has drastically reduced the costs of storing, retrieving, transmitting and verifying tax information. Thus, while legal simplicity remains essentially unchanged, economic simplification may take place due to reductions in tax computational compliance costs. In short, while legal simplicity and economic simplicity are linked, they may or may not be consistent.

Holding time and location constant, one can use aggregate operating costs as an index of the complexity of one tax law versus in relation to another. However, for comparisons across countries or over time, the absolute magnitude of operating costs is not a sensible measure of simplicity of the tax under study. There is an obvious need to adjust for the size of the economy. There are two ways of doing this: one is to calculate the average operating costs per taxpayer, the other is to divide operating costs by the amount of tax revenue collected.

Averaging the operating cost per taxpayer is not a good measure of complexity because it involves making comparisons of averages based on very different populations of taxpayers. To illustrate, consider a simple, hypothetical numerical example:


Tax Law
Taxpayer 1’s Operating Costs ($)
Taxpayer 2’s Operating Costs ($)
Taxpayer 3’s Operating Costs ($)
Total
Operating Costs ($)
Average Operating Costs ($)
A
10,000
na
na
10,000
10,000
B
11,000
3,000
1,000
15,000
5,000

Although the average operating costs under tax law B are lower than those under tax law A, it is clear that tax law A is simpler than tax law B for all taxpayers concerned.

The other alternative is to divide operating costs by tax revenue collected. This is the traditional approach taken in evaluating the simplification impact of domestic tax reform[12] or for international comparisons in the tax operating costs literature.[13] It is not difficult to see that this well adopted measure ignores the effect of tax rate severity. Consider, for illustration, the effect of a rise in the GST standard tax rate. It is most likely that the GST operating costs will grow at a smaller rate than the GST revenue, which will result in a lower relative operating costs. According to the relative operating cost measure, raising the GST tax rate alone makes the GST simpler. This is not sensible!

For the GST under consideration, a better measure of its complexity is thus

Relative GST Operating Costs Adjusted for Tax Rate Severity = GST Standard Rate × GST Operating Costs/GST Tax Revenue

For the tax system as a whole, the above measure becomes:

Relative Operating Costs Adjusted for Tax Rate Severity = Operating Costs/GDP

where GDP stands for Gross Domestic Product.

It has been formally demonstrated elsewhere that the above ratio captures not only the legal complexity of the tax system but also the tax culture.[14] Thus, to focus only on legal simplicity, it will be necessary to disentangle the effects of tax culture from the above ratio. Developing an index to capture the effects of tax culture on tax complexity is definitely an under-explored area of tax compliance research.

Because tax simplicity has several different meanings, so too has tax simplification. To simplify a piece of tax legislation or a tax system could mean any of the following:

• to improve it in the linguistic and structural sense;

• to make it simpler in the content or conceptual sense;

• to lower its relative operating costs .

The important thing to note is that, as discussed above, some of the above objectives may not be compatible. Thus it is important for tax policy makers to articulate their specific aims so that the simplification effects of tax policy changes can be properly evaluated. It is also important to reiterate that simplification in the sense of operating cost reduction may take place due to technological progress rather than legal simplification.

III. IS TAX SIMPLICITY DESIRABLE?

Thus far, it has been taken for granted that tax simplicity is a good thing. After all, simplicity has always been a well accepted criterion of a good tax system, dating back at least to the writing of Adam Smith over two centuries ago.[15] The Asprey Committee of Taxation Review in Australia unequivocally stated that “after equity, simplicity is perhaps the most universally sought after of qualities in individual taxes and tax systems as a whole …”.[16] But it is easy to exaggerate the importance of tax simplicity. It is also sometimes overlooked that simplicity is neither a static concept nor the sole criterion for a good tax system.

First, tax law does not exist in a vacuum. It is a necessary product of the economy and in some limited sense can be viewed as a measure of how well a society is organised. In a less developed economy, the tax authorities can afford to have uncomplicated tax. In a more mature economy where market structures, business organisations and commercial transactions have grown continuously (and rapidly) in complexity, tax laws have to evolve accordingly. The tax system of an economy is analogous to the dress of a person. As a person grows taller, a well-fitted dress should become accordingly longer and wider. A complex economy must have more complicated tax laws.

The increase in the length of the Income Tax Assessment Act 1936 (Cth) (“ITAA 1936”) should not be used as a clear evidence of the increasing complexity of the Australian income tax law. Income (including capital gains) is after all a very complicated concept and its complexity has grown over time. By implication income tax law must grow accordingly to be more complex. Stating that the ITAA 1936 has become more complex is accurate but also irrelevant. This is because while the income tax law has become more complex with respect to the 1936 benchmark, its growth in complexity may not be critical in terms of the growth of the Australian economy. In short, the simplicity of a tax system must be viewed relative to the state of the economy. Dynamic simplicity is desirable but not static simplicity.

Secondly, tax simplicity is desirable in isolation but not necessary in conjunction with other objectives of the tax system. It has been shown in the theoretical literature that income tax simplification has an ambiguous effect on tax revenue.[17] This is because some taxpayers pay more while some pay less, making a decline in total tax collection possible. It is well known in the legal profession that simplicity may contradict equity, an important goal of tax policy.[18] However, it is not so well known to lawyers that simplicity may also contradict efficiency. A good example is the so-called Ramsey rule of inverse price elasticity of demand.[19] A simple version of this rule states that the optimal tax rate of a commodity is inversely related to the price elasticity of demand for this commodity. That is, a good whose demand is relatively price inelastic (eg, cigarettes) should be taxed relatively highly. Thus, a ‘simple’ broad-based, uniform tax rate such as the GST is not as efficient as an appropriately designed broad-based, multi-tax rate consumption tax.

Tax simplification is not easy because of the reaction of taxpayers and administrators to changes in tax legislation. Tax compliance costs typically consist of computation and planning costs. However, it is not always easy to achieve simultaneous reductions in these costs. While a particular tax change may reduce computational costs, it may at the same time raise tax planning costs, resulting in an ambiguous net simplification effect.

In sum, it must be recognised that the tax system cannot remain simple in the absolute or static sense while the economy continues to evolve. Tax simplification at the expense of other objectives of the tax system may not be a desirable thing. Instead of scoring political points, the government should be open and frank about the inherent difficulties in trying to simplify the tax system. It is not productive for the government to exaggerate the true simplification prospects of its tax reforms in order to pursue other hidden agenda.

IV. A SIMPLER TAX SYSTEM?

The Federal Government has constantly cited the complexity of the Australian tax system as a rationale for its tax reforms[20] and this view has been echoed by the Review of Business Taxation.[21] As the Government’s tax reforms are quite comprehensive and some of which are still prospective, this paper will focus on some of the most important reforms, which have been legislated. Also since the new tax system has not yet commenced, the analysis of economic simplicity will be on plausible speculations and preliminary estimates.

The central piece of the Government’s tax reform strategy is clearly the replacement of the Wholesale Sales Tax (“WST”) and some State taxes with the GST. It is generally agreed among tax lawyers that the GST legislation is not simpler than the WST legislation. Since the WST legislation is 70 years old, a more sensible comparison would be between the WST now and the GST in 2070. This is not a promising comparison for the GST.

In terms of operating costs, the GST is more complex than the taxes it seeks to replace. This is because the GST involves a very large number of businesses as taxpayers and tax collectors. In its original Regulation Impact State accompanying the GST Bills, the Government estimated that the recurrent social compliance costs of the GST in 2001-2 at $1.9 billion.[22] Using the same assumptions as the Government, Tran-Nam arrived at a figure of $2.2 billion annually[23] and this upward revision has been accepted by the Government.[24]

More importantly, Tran-Nam showed that replacing the WST and some State taxes with the GST would raise the recurrent operating costs of the tax system by $1.2 billion annually.[25] The estimated increase in recurrent compliance costs alone is almost $1 billion a year and this is a very significant proportion of the current compliance costs of business taxation.[26] There will also be start-up costs for the GST with estimates ranging widely from $2.2 billion to $24 billion.[27] The most plausible estimates seem to be between $4.5 by Tran-Nam and $5 billion by the Victorian Employers’ Chamber of Commerce.[28] Another problem with the GST is that its compliance burdens will fall disproportionately on small businesses.

V. SOME OTHER TAX REFORMS

A. Cessation of the TLIP

The Government’s tax reform package spelt the end of Tax Law Improvement Program (“TLIP”) and the ITAA 1997 will itself disappear ultimately into the integrated tax code.[29] The TLIP has shown two things. First, poor drafting has made the tax law difficult to comprehend. Second, without tax policy changes, the project’s simplification impact has been limited. Thus, the cessation of the TLIP will have little effect on the simplicity of the tax system.

B. Australian Business Number (“ABN”)

The introduction of the ABN, to commence on 1 July 2000, will reduce business costs in their dealings with the government. However, its benefit to the operation of the tax system should not be overestimated. First, many businesses for reasons such as limitation of legal liability, security, financial planning and tax planning choose to use several business vehicles in a single business entity. For example, a medium-sized business entity may consist of one or more registered companies: a family trust, a superannuation fund and perhaps even a few partnerships. Since each of these business taxpayers is given an ABN, the simplification benefits of the ABN will not be all that large. Secondly, the benefits of ABN are often associated with the increasing computerisation of taxpayers. So some of the benefits are attributed to technological progress rather than the ABN alone.

C. Pay-As-You-Go (“PAYG”) & Business Activity Statement (“BAS”)

The PAYG has been promoted as a simplifying measure of the tax collection system. It is supposed to be an integrated system for reporting and paying withholding amounts and tax on business and investment income. It replaces 11 existing system and commences, for most taxpayers, on 1 July 2000. The PAYG is basically an old wine with a new label (and conceptually analogous to the TLIP). Its main advantage is to align payments dates for different kinds of taxes. But this advantage is more apparent than real. First, in order to prepare the quarterly BAS associated with PAYG, business taxpayers still have to perform the same calculations as under the old system. Secondly, virtually all BASs will be submitted to the Australian Taxation Office (“ATO”) on the same dates and, with a stable number of ATO staff, this will cause backlogs and delays in processing the BASs received.

Under the PAYG withholding system, some large businesses potentially have to remit PAYE taxes to the ATO more often than they do now (twice monthly) . Similarly, under the PAYG instalments system, many small business taxpayers will have to report and remit taxes to the ATO on a quarterly instead of yearly basis. More frequent reporting and payment of taxes will increase, not lessen, paperwork. The introduction of the PAYG will also see an advancement in the collection of company and provisional tax instalments. The PAYG system will thus reduce the cash flow benefits currently enjoyed by business taxpayers, especially large companies. It seems plausible that the PAYG system is driven by revenue rather than simplification considerations.

D. Capital Gains Tax

The capital gains tax demonstrates the difficulty of tax simplification. The new law, becoming effective from 11:45 pm on 21 September 1999, removes the indexation factor and appears to make calculations of capital gains simpler for assets purchased on or after the commencement date. (For assets purchased before 21 September 1999, calculations will not be simpler because taxpayers will have to calculate their gains under both the old and new options.) However, the flat 50 per cent exemption for realised nominal gains on assets held for more than a year will give taxpayers the incentive to exploit the categories of qualified assets and to convert other forms of income into capital gains. Thus, a small reduction in computational compliance costs will likely be accompanied by a greater increase in planning costs.

In summary, tax reforms contain measures that have an adverse effect on the simplicity of the tax system. Overall, there is no evidence to support the claim that the new tax system is simpler than the existing one. If anything, the operating costs of the tax system are likely to increase as a result of tax reform. Since the revenue and simplicity effects of the GST are by no means undisputed,[30] the only clear effects of tax reforms, as the Government has always intended, are the change in the tax mix and the consequential implications on the distribution of tax burdens.

VI. CONCLUSIONS

This paper argues that simplicity is a difficult concept to define and measure because it contains several intimations, some of which may not be consistent. Economic or effective simplicity (the operating costs of the tax system) appears to be the most operational approach to simplicity. It encompasses legal simplicity, tax culture, size of the economy and level of technology. It has been argued that economic and legal simplicity move in the same direction only in some cases. It has also been argued that the conventional index of operating costs relative to tax revenue is a flawed measure of economic simplicity.

More importantly, tax simplification is not easily achievable partly because of the behavioural responses of taxpayers. It is difficult to make a tax change that reduces computational and planning costs simultaneously. Dynamic, not static, simplicity is desirable in a continuously and rapidly evolving economy. Simplicity also clashes with other criteria of a good tax system, and this may substantially reduce its claim to importance as a goal of tax policy.

The government, as tax policy makers, should publicly recognise the inherent difficulty in making the tax system simpler. It is unproductive to use the slogan of ‘simplification’ as a means to pursue other hidden agenda. In the Australian context, an examination of the Federal Government’s tax reforms suggests that, contrary to its repeated claim, the new tax system is not simpler than the old one. Spending money to tell the public how complex the old tax system is will not make the new tax system any simpler. Current reforms basically represent an attempt to change the tax mix and to redistribute the tax burdens between sections of the community.

Looking forward to the future, there needs to be more collaboration between lawyers, economists and psychologists in this area. Economists can quantify the tax operating costs to provide some ideas about the complexity of a specific tax (or tax collection mechanism) or the tax system as a whole. They could also identify specific tax laws or activities which taxpayers have difficulties complying with. This kind of quantitative data complements tax lawyers’ qualitative analysis of the causes for complexity in the tax system. Both sources of information, together with psychologists’ studies of voluntary compliance, are potentially useful in guiding tax policy makers and tax law drafters in their quest for a simpler tax system.


[#] Paper prepared for a special issue on the Australian tax system of the UNSW Law Journal. The author wishes to thank Colin Fong for his valuable input.

[*] Senior Lecturer, Australian Taxation Studies Program (“ATAX”), Faculty of Law, University of New South Wales.

[1] See, for example, K Devos and G Richardson, “Australia’s Tax Law Simplification – A Critical Review”, presented at 11th Australasian Tax Teachers Conference, 5-7 February 1999; R Krever, ”Simplicity and Complexity in Australian Income Tax” and RH Woellner, C Coleman, M McKerchar, M Walpole, and J Zetler, “The Impact of ‘Simplified’ Drafting on Tax Compliance Costs: Results of a Pilot Study”, presented at 12th Australasian Tax Teachers Conference, 4-5 February 2000.

[2] Manipulability is the reduction in the number and complexity of transactions undertaken to avoid taxes. See J Slemrod, “Complexity, Compliance Costs, and Tax Evasion” in JA Roth and JT Scholz, Taxpayer Compliance: Social Science Perspectives, Volume 2 (1989) 156.

[3] GS Cooper, ”Themes and Issues in Tax Simplification” (1993) 10 Australian Tax Forum 417 at 424.

[4] The functional scheme entails provisions that operate in the same manner (eg, deductions, credit, tax avoidance, etc) be grouped together in the same part of the Act.

[5] J Prebble, ”An Evaluation of the New Zealand Income Tax Law Rewriting Project From a Compliance Costs Perspective”, presented at International Compliance Costs Symposium, 26-7 April 2000 at 12.

[6] See, for example, JA Jones, ”Tax Law: Rules or Principles” (1996) 63(17) Fiscal Studies at 75; J Prebble, ”Should Tax Legislation be Written from a Principles and Purpose Point of View or a Precise and Detailed Point of View?” [1998] British Tax Review 112.

[7] See Cooper, note 3 supra.

[8] See Krever, note 1 supra at 24.

[9] By ‘tax culture’, it is meant the extent to which taxpayers engage in tax avoidance and tax evasion and the tax administrators’ efforts to combat these schemes.

[10] The Flesch index has been used extensively to measure the readability of accounting and finance information, tax legislation and business communication textbooks. The Cloze test is a procedure in which a passage of text is chosen, then every fifth word is deleted and participants are required to insert the missing words.

[11] It has been argued elsewhere that the costs of designing, drafting and enacting the legislation should also be included in the analysis. See B Tran-Nam, ”Tax Reform and Tax Simplification: Some Conceptual Issues and a Preliminary Assessment” [1999] SydLawRw 20; (1999) 21 Sydney Law Review 500 at 511-2.

[12] Commonwealth Taxation Review Committee, Full Report, 1975 at [3.19].

[13] See, for example, CT Sandford (ed), Tax Compliance Costs Measurement and Policy (1995).

[14] B Tran-Nam, “Tax Compliance Costs Methodology: A Research Agenda for the Future”, presented at International Compliance Costs Symposium, 26-7 April 2000 at 11-13.

[15] See Book Five, Chapter II of A Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776).

[16] See Commonwealth Taxation Review Committee, note 12 supra.

[17] P Bardsley, “Tax Compliance Games with Imperfect Auditing”, Research Paper No. 548, Department of Economics, University of Melbourne (1997).

[18] RH Woellner, S Barkoczy and S Murphy, 2000 Australian Taxation Law (10th ed, 1999) at [1-230].

[19] Price elasticity of demand measures the percentage change in quantity demanded in response to a one percentage change in price. If this ratio is greater (less) than unity, demand is said to be elastic (inelastic).

[20] Australia, Treasury, Tax Reform: Not a New Tax, a New Tax System, August 1998 at 8-9 and 44.

[21] Australia, Review of Business Taxation, A Tax System Redesigned: More Certain, Equitable and Durable, July 1999 at 16-17.

[22] Australia, Treasury, ‘Regulation Impact Statement for the Introduction of a Goods and Services Tax’, A New Tax System Bills 1998 (Cth) at 8.

[23] B Tran-Nam, ”Assessing the Revenue and Simplification Impacts of the Government’s Tax Reform” (1999) 2 Journal of Australian Taxation 340.

[24] Joint Government’s Advocate, GST Implementation and Compliance Costs, Attachment 1D in letter to the President of the Australian Industrial Relations Commission Bench, 31 March 2000 at 9.

[25] See Tran-Nam, note 23 supra.

[26] The recurrent compliance costs incurred by Australian business taxpayers in 1994-5 were estimated at $8.9 billion. See C Evans, K Ritchie, B Tran-Nam and M Walpole, A Report into Taxpayer Costs of Compliance (1997) at 51.

[27] B Tran-Nam, ”The Implementation Costs of the GST in Australia: Concepts, Estimates and Implications” (2000) ATAX Mimeo at 14. Paper is available upon request.

[28] Ibid at 16-8.

[29] Note 20 supra at 149.

[30] Note 27 supra at 22.


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