Colmar Brunton Social Research (CBSR) was commissioned by the Inspector-General of Taxation to conduct research into the impact of perceptions of non-lodgement on lodgement behaviour. This report presents the findings of this research.

The research consisted of 800 Computer Assisted Telephone Interviews (CATI) with members of the Australian public aged 16 years and older (Stage 1), followed by an online survey of 317 taxpayers who were required to submit a tax return for the 2006/07 financial year but failed to lodge (Stage 2). Stage 1 was designed to inform IGT of the lodgement attitudes and behaviours one would expect within the general Australian population. Stage 2 was designed to capture a greater level of detail about the attitudes and behaviours of those required to submit a return but who failed to do so.

The data collected in Stage 1 has been combined with that collected in Stage 2 to provide a more robust analysis of required non-lodgers than would have been possible had Stage 1 been conducted in isolation. This report therefore combines the findings of both Stages 1 and 2.

The data collection in Stage 1 took place between 12th May and 26th May 2008. Stage 2 data collection took place between 6th June and 20th June 2008.

2.1 Background

The Inspector General of Taxation's (IGT) objective is to improve the administration of the tax laws for the benefit of all taxpayers.

The research program proposed in this document is part of a larger scale investigation into the Australian Taxation Office's handling of taxpayers who fail to lodge tax returns. The review aims to identify and recommend changes that will assist the Tax Office to improve the efficiency, effectiveness and fairness of the current approaches to managing the non-lodgement of income tax returns.

2.2 Research objectives

The overarching aim of the research is to determine the impact of perceptions about the level of lodgement on past lodgement behaviour and the likelihood to submit a tax return in the future.

The primary objectives of the research were to:

  • Deliver an estimate of the level of non-lodgement of individual income tax returns that exists in the community10;
  • Provide information around the level of individual non-lodgement which would change participants' own lodgement behaviour;
  • Provide details of the level that the community expects the Tax Office to keep non-lodgement at;
  • Determine whether the community accepts a regime where non-lodgers had their refunds docked or forfeited; and
  • For required non-lodgers:
    • how many returns have they not lodged (1, 2, 3 or more than 3 years);
    • the main reason they have not lodged; and
    • whether they feel at risk of Tax Office compliance action.

10 In order to determine the impact of perceptions about the level of lodgement on past lodgement behaviour and the likelihood to submit a tax return in the future, it was necessary to estimate both the proportion of people who were required to lodge and those who failed to lodge.