A comparison of collaborative compliance agreements between taxpayers and revenue authorities : lessons for South Africa

Abstract

Conventional methods to close the tax gap and increase government revenue by facilitating and enforcing taxpayer compliance have been all but exhausted. New opportunities to mend the taxpayer’s relationship with the revenue authority do exist through the establishment of collaborative compliance agreements. This research investigated global cooperative-compliance enhancing taxation policies and strategies. After assessing the aptitude of South Africa’s taxation infrastructure to assimilate new compliance policies and then ascertaining and applying the recommendations of relevant experts, compliance strategy proposals were suggested for adoption locally. The study focused on four major tax compliance themes of transparency, education, responsive regulation and reintegrative enforcement, together with their associated compliance strategies, which could improve the taxpayer-authority relationship. A qualitative research methodology was adopted and fifteen interviews were conducted with relevant experts who could provide knowledgeable opinions on the issues raised. The respondent tax experts confirmed the importance of these themes as well as the need to introduce the eight compliance strategies, which were proposed. The study concluded by recommending the following strategies: Simplified Personal Taxpayers Receipt, the publication of Compliance Statistics, tax Enculturation and Aptitude development to form part of the Economics and Management Sciences curriculum, a Taxpayers’ Week, the development of a Responsive Service Charter, a Compliance Rewards System, and the introduction of Reintegrative Shaming to rehabilitate non-compliant taxpayers.