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Abstract
A combination of both persuasive and enforcement measures have been applied by governments in attempting to tackle tax non-compliance. With increasing pressure to raise revenue in the current economic climate, governments need to assess the effectiveness of various compliance measures. This paper presents and analyses the strategies adopted by tax authorities globally and specifically in Australia and Norway, regarding the public disclosure of tax information and the likely compliance impact. The paper provides an insight into how public disclosure could indirectly improve compliance in the setting of one country, while some limited disclosure may supplement other compliance strategies in another.
Key Words: Tax compliance, public disclosure, deterrence
1. INTRODUCTION
It is evident that a large volume of research into the factors that act as a deterrent and impact upon tax compliance has been conducted over many years (Kirchler, Hoelzl, and Wahl, 2008; Slemrod, 2007; Raskolnikov, 2006; Feld and Frey, 2003 & Dubin, Graetz, and Wilde, 1987). However, of the different factors employed within various research studies, an investigation into the impact of public disclosure of tax information has also been critical (Mazza, 2003; Laury & Wallace, 2005; Kornhauser, 2005). Arguably, while there is evidence of public disclosure at the corporate level limited findings have appeared with regards to individual income tax reporting (Slemrod, Thoresen, Thor, and Erlend, 2013). A key reason for this is that very few countries practice public disclosure of tax information at the individual level (Slemrod, et al., 2013, p 5). The debate over whether public disclosure of tax information or tax privacy promotes greater deterrence and thereby improves taxpayer compliance is as 3 old as the income tax itself (Bittker, 1981).
This paper argues that public disclosure of taxpaying is potentially useful for improving compliance in Australia. Public disclosure is identified as an addition to 'traditional compliance strategies'¾audits, simplifications and guidance. The theoretical reasons for why or why not compliance may be improved as a result of increased public disclosure are discussed in section 2 of the paper. Section 3 discusses the impact of public disclosure of tax information globally, citing specific countries which have employed various measures. The paper then proceeds to compare the strategies of two countries which are relatively at the extremes with respect to individual...