By Christopher Niesche

You may not guess it from our grumbling, but Australians and New Zealanders place a higher degree of trust in our tax systems than residents in many other countries, a recent global survey found. We also believe our tax systems are efficient and easy to use.

The Public Trust In Tax: Surveying Public Trust In G20 Tax Systems study, supported by Chartered Accountants Australia and New Zealand, polled more than 8000 residents of G20 nations plus New Zealand about their perceptions of their tax systems and the professionals who administer and interact with it.

It rated New Zealanders fifth out of 21 nations and Australians sixth when it came to trusting tax authorities.

Overall, respondents in China had the most trust in their tax authorities and those in Argentina the least.

Figure 1. Trust and distrust in tax authorities around the world (click image to enlarge)Source: Public Trust In Tax: Surveying Public Trust In G20 Tax Systems, 2021.

The survey also found Australians and New Zealanders rated similarly on the overall fairness of the process of interacting with tax authorities.

Figure 2. Views on the overall fairness of the process of interacting with tax authorities (click image to enlarge)Source: Public Trust In Tax: Surveying Public Trust In G20 Tax Systems, 2021.

What drives trust in the tax system?

John Cuthbertson FCA, tax leader New Zealand at CA ANZ, says the more people trust the tax system, the more likely they are to pay their share of tax.

Several factors underpin trust, he says. People need to feel the system is fair and that everyone will be treated equally; that there will be no favouritism or undue concessions. Also, the tax legislation should be unambiguous so there is certainty of outcome for taxpayers. Taxpayers also need to believe authorities will police those rules in a uniform manner.

Australians and New Zealanders also placed a high degree of trust in their accountants – New Zealanders rated fourth and Australians sixth among those surveyed.

Across the 21 nations, South Africans had the most trust in accountants followed closely by India. Individuals in France trusted accountants the least.

Figure 3. Degrees of trust and distrust in accountants (click image to enlarge)Source: Public Trust In Tax: Surveying Public Trust In G20 Tax Systems, 2021.

Cuthbertson describes accountants as having a “gatekeeper role in terms of the integrity of the tax system”, particularly in New Zealand where they play a more collaborative role in terms of being consulted on the design of tax legislation than they do in Australia.

Cuthbertson’s CA ANZ colleague, Australian tax leader Michael Croker CA, says accountants have a slightly confusing role in the tax system.

“On the one hand, they have the client relationship and they see that as their primary relationship,” he observes. “The tax regulators of course are always saying, well, accountants and tax people play an incredibly important part in maintaining confidence in the tax system.”

“Accountants and tax people play an incredibly important part in maintaining confidence in the tax system.”

Who isn’t trusted?

In terms of rating how much they trust politicians, Australians and New Zealanders were still high compared with other nations. Nonetheless, more people distrusted politicians than trusted them, particularly in Australia.

Figure 4. Trust in politicians across the sample (click image to enlarge) Source: Public Trust In Tax: Surveying Public Trust In G20 Tax Systems, 2021.

Likewise, more residents of both nations distrusted the media and social media than trusted them. In fact, only France had a lower trust of the media than New Zealand.

Figure 5. Degrees of trust and distrust in the media 2021 (click image to enlarge)Source: Public Trust In Tax: Surveying Public Trust In G20 Tax Systems, 2021

Cuthbertson says politicians undermine trust in themselves and the tax system when they “play with” the tax system and are more interested in the electoral cycle than driving reform.

“They fiddle with the tax system and put in ad-hoc changes which tend to stuff up their coherence,” he says.

“[Politicians] fiddle with the tax system and put in ad-hoc changes which tend to stuff up their coherence

Bolstering trust in the tax system will become increasingly important as governments around the world come under fiscal pressure, says Croker.

“Politicians will be coming under enormous stress in the not too distant future as they try to address budget repair, repay high levels of government debt, address climate change and aged care, and so on,” he says.

“Courageous politicians are thin on the ground and they struggle to get the message across to their communities that their tax system is all about shared sacrifice,” he says.

Easy-to-use tax systems

Residents of the Australia and New Zealand also judged their tax systems as comparatively easy to use.

Figure 6. Views on the ease and efficiency of filing taxes (click image to enlarge)Source: Public Trust In Tax: Surveying Public Trust In G20 Tax Systems, 2021.

Australians were third in rating the ease and efficiency of filing taxes, and New Zealanders were fifth. New Zealanders also spend the least time managing their tax affairs of any nation, followed by Australians. (Eighty per cent of respondents in Australia and New Zealand spend less than a week each year on tax, and about 50% less than a day.)

Indians said they spent the most time on their tax affairs – the majority devoting more than a week to tax chores – followed by Turks and Italians.

Figure 7. Time people spend on managing their tax affairs each year (click image to enlarge)Source: Public Trust In Tax: Surveying Public Trust In G20 Tax Systems, 2021

The survey, conducted online in the first quarter of 2021, was supported by the Association of Chartered Certified Accountants (ACCA), the International Federation of Accountants (IFAC) and Chartered Accountants Australia and New Zealand (CA ANZ). It is the third edition of the Public Trust in Tax study, with previous surveys completed in 2017 and 2018.

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Public Trust In Tax: Surveying Public Trust In G20 Tax Systems

This third edition of the Public Trust in Tax study comes in the wake of one of the biggest shocks to society and economies in living memory. It reflects the views of more than 8000 people across the G20 countries and New Zealand.