Journal of Business & Economic Policy

Tax Compliance as a Red Tape to Businesses: Conceptual Issues and Empirical Evidence from Australia Binh Tran-Nam

Abstract
Businesses typically face a variety of regulations, including taxation, imposed externally by the government. While estimates of the costs and benefits of regulations are difficult to obtain, there have been ongoing concerns, both at the industry and government levels, that regulations are excessive and impede business productivity and growth. This paper examines taxation compliance as a red tape to businesses. It consists of three interrelated discussions. The first is a concise review of tax compliance, including main theoretical models of tax compliance behavior. Tax compliance costs are naturally discussed next. This discussion provides a critical assessment of the meaning, and conceptual and measurement issues relating to tax compliance costs. The third section presents empirical estimates of tax compliance costs of Australian businesses. The numerical estimates presented are drawn from a recent nationwide study undertaken by a team of multi-university researchers and funded by an Australian Research Council Linkage Grant.

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