Woellner, R., Coleman, C., McKerchar, M., Walpole, M., & Zetler, J. (2007). Can simplified legal drafting reduce the psychological costs of tax compliance? An Australian perspective. British Tax Review, 6, 717-734.

Woellner, R.; Coleman, C.; McKerchar, M.; Walpole, M.; Zetler, J.

2007

Woellner, R., Coleman, C., McKerchar, M., Walpole, M., & Zetler, J. (2007). Can simplified legal drafting reduce the psychological costs of tax compliance? An Australian perspective. British Tax Review, 6, 717-734.

Australia adopted a simplified style of legal drafting in 1997 in order to reduce the costs of tax compliance. Psychological costs are one aspect of compliance costs which has previously received little attention from researchers. This article reports on research undertaken to determine the impact of simplified legal drafting on the psychological costs of compliance. The research was conducted using a mixed method approach which included a problem-solving experiment, coding of non-verbal behaviour, self reports and a focus group. Subjects included both novice and expert users, with the experts being tax practitioners or technical staff from the Australian Taxation Office. It found that both novice and expert users of tax legislation felt more positive when using the simplified legislation, with the experts experiencing a more positive effect than did the novices. There were no significant differences in the ability of either novices or experts to correctly apply the legislation based on its drafting style, or in the time taken in doing so. While the absolute measurement of psychological costs remains a challenge, the positive impact of a simplified style of legal drafting on these costs will be of relevance to tax administrators in many jurisdictions, not only Australia. This work may be of particular interest to the UK Tax Law Rewrite Project.

Both novices and experts tended to be better able to apply the law correctly when they used ITAA 1997 than when they used ITAA 1936, however, this relationship was not statistically significant. The results of the self-reports support the finding that both novice and experts find using ITAA 1997 a better experience than using ITAA 1936.

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