Business Research Project: Comparing Tax Laws in Australia & NZ

This report provides a comparative analysis of the tax systems in Australia and New Zealand, examining key aspects such as income tax, corporate tax, and GST. It investigates the fundamental role of literacy in understanding tax laws, the potential for harmonized taxation reporting and enterprise strategies, and the creation of tax loopholes and conflicts due to distinct tax laws. The research employs a mixed methodology, combining qualitative and quantitative approaches, including surveys and data analysis to compare and contrast the tax structures in both countries. The study also explores the perceptions of taxpayers, including small enterprise owners, and their compliance behavior, examining factors such as tax morale, fairness, work practices, and deterrence. The findings highlight the differences in tax revenue sources, compliance rates, and the impact of various tax policies on different groups of taxpayers in Australia and New Zealand.

Comparing Tax Law in “Australia and New Zealand” 1
COMPARING TAX IN AUSTRALIA AND NEW ZEALAND
By (Name)
Class
Professor
College
City and State

Comparing Tax Law in “Australia and New Zealand” 2
Introduction
The monetary system of Australia and New Zealand are distinct from each other,
although still have a common ground. Typically, tax laws are quite stringent in both nations, and
commoners and elite are required to a bind with such regulations given that working against
these laws can incur adverse punitive action. Fortunately, the Australian government has made
several efforts to make its tax laws more flexible compared to the New Zealand government.
Thus, the Australian tax laws seem to be more appealing to the general public than that of New
Zealand as flexibility enables tax to adapt to changes in the economy, such as inflation. This
report conducts in-depth analysis on three essential sections pertaining the tax system in
Australia such as how and why literacy is fundamental with regards to taxation laws, and the
efforts that are being put in place by the Australian administration to affiliate with the public
unlike the New Zealand administration. Secondly, the article focuses on whether or not Australia
and New Zealand can utilize the same taxation reporting, and enterprise strategy when operating
in both nations. Thirdly, the report prioritizes on whether two distinct tax laws when in operation
in both countries create loopholes and conflicts to save taxes. Therefore, the article analyses the
findings on tax laws in New Zealand and Australia, and tries to find common ground between
them.
Research Questions
 How and why is literacy fundamental with regards to taxation laws?
 How can Australia and New Zealand utilize the same taxation reporting and enterprise
strategy?
 Which are the two distinct laws when operating in Australia and New Zealand that
creates loopholes and conflicts to save taxes?

Comparing Tax Law in “Australia and New Zealand” 3
Methods
Qualitative and Quantitative Analysis
The research was conducted using a mixed methodology approach that draws from both
the qualitative and quantitative paradigms and their processes; this means that using various
methods either sequentially, or concurrently. Moreover, the rationale for utilizing several
methods is that it strengthens the overall research design by enabling the findings of one
approach to inform another, which allows for greater exploration (Tran-Nam et al., 2013, p.178).
Alternatively, using multiple techniques enables a researcher to draw on the strengths of one
paradigm or approach, while minimizing the inherent limitations of another. Also, this reflects
the desire of the researcher’s part to obtain meaningful conclusions.
The essence of considering reliability and validity issues to a research is noting the
preciseness of the qualitative and quantitative analysis. Validity acts as a quality test of the study,
which can be classified as internal, external, and construct validity. Reliability accounts for the
capacity of replicating the study, and quality testing of the research. Even though the article
focuses on a qualitative and quantitative data analysis, the assignment also borrows from the
comparative approach data from New Zealand, and Australia regarding tax laws are compared
and contrasted. From the data collected, New Zealand shares some similarities with Australia
regarding imputation systems for a GST and corporate distribution of members (Freudenberg,
Tran-Nam, Karlinsky and Gupta, 2012, p.688).
The Australia tax law acts as the body of one integrated statue that covers corporations,
individuals, and flows through trust and entities. For instance, income tax gets imposed on a
global perspective such that an Australian resident pays tax from his or her income earned in

Comparing Tax Law in “Australia and New Zealand” 4
Australia. Notably, Australia taxpayers get a credit for foreign taxes paid to the foreign country,
although it is subjected to limitations. Alternatively, in New Zealand, has specific taxes that are
imposed on sole proprietors, exclusive partnerships, general partnerships, trusts, and
corporations; this is similar to that in Australia.
In spite of research focusing on the responses of three business groups operating in both
Australia and New Zealand, the study also pays close attention to the structure of business
operations in both nations. Thus, tax laws are noted to be more complicated for mini businesses
operating in both Australia and New Zealand. Also, the questions asked for the various segments
did not differ to account for jurisdictional differences. For instance, gift and estate laws do not
exist in both Australia and New Zealand.
Usually, small enterprise studies are restricted to interviews, and prioritize on group
conversations to gather data regarding levy matters. Only a handful of researches use massive
samples with a “self-report methodology.” The study conducted in this article is restricted to
small enterprise taxpayers, although it focuses on a huge data set that was gathered randomly
from the Australian and New Zealand society. Importantly, the methodology used for this
research is occasionally effective at estimating who among the mini enterprise “taxpayers” is
resistive, and it picks up on particular challenges facing little business taxpayers; for instance,
compliance charges that affect the small enterprise.
The qualitative and quantitative methodology used for this research does allow the
picture to be painted on how “small enterprise owners” dissent from other groups of the
Australian and New Zealand society regarding tax matters. Notably, only a handful of studies
utilized a different sample comprising small enterprise taxpayers, and taxpayers who work in

Comparing Tax Law in “Australia and New Zealand” 5
various organizational contexts. The survey offers a number of questions linking to the social
and psychological elements, which may differentiate the various categories of “taxpayers”.
Hypothesis, Sampling Size and Sampling Method
The hypotheses were evaluated based on social data evaluation of people in New Zealand
and Australia. A total of 7760 questionnaires were distributed, 2000 returned after several
reminders, and responses were given at a 29 per cent rate. Thus, the response rate compares the
tax survey of people in New Zealand and Australia. Notably, citizens in both countries seemed
uninterested in filing the questionnaires linked to tax compared to when they are asked about
other topics. Therefore, the sample was a relatively representative of the general population in
Australia and New Zealand, which was based on sex, ethnicity, age, marital status, and
occupation of citizens in both states. Ahmed and Braithwaite (n.d) note:
Each respondent was mailed three items: an accompanying letter signed by the director of
the research centre, a questionnaire, and a postage-paid return envelope. The
accompanying letter briefly described the intent of the survey, guaranteed strict
confidentiality of responses, and encouraged respondents to complete and return the
completed questionnaire in a sealed envelope. An identification number appeared in the
questionnaire to allow follow-up reminders of non-respondents asking them to complete
and mail the survey if they had not already done so (p.12).
The “deterrence hypothesis” was evaluated using various metrics: the likelihood of being caught;
the potential of being seized “multiplied by” the likelihood of getting deterrents “multiplied by”
the seriousness of the out-turns. In addition, a three product gauging the “perceived tax office”
power over little enterprises, “self-employed”, and ordinary individuals to evoke conformity; and
a “four-item scale” gauging the level to which the assenter had encountered a survey, a penalty, a
check, or dispute over excise transactions (Ahmed and Braithwaite, n.d, p.14).

Comparing Tax Law in “Australia and New Zealand” 6
Alternatively, the “tax morale hypothesis” was assessed through various metrics. This is
because it is believed that doing what is right was evaluated through the duties of accepting the
“tax authority decisions scale”, and the individual standard of “tax honesty scale.” Thus, those
who surmise in obeying the legislation are likely to demonstrate merits, which support respect
and propriety of law and regulations in the Australian and New Zealand society. Also, such
merits are measured through the “security orientation scale”, which suggests that levies can be
utilized in supporting law and regulations through ratings of the predilection for “security
institute expenditure”. These metrics are utilized as gauges of the kind of “tax morale”
demonstrated in internalized “law-abidingness”.
Out of the various strategies used, only four represent “tax morale” as an internalized
allegiance in redistributing expedients. The initial was the need to utilize tax for employment,
education, legal, and welfare support, and it reviewed the relative predilection for allowing
institution disbursement. The second metric values “orientation scale”, while the “third scale”
computed the resistance to enormous social and executive justice initiatives, which undermine
competition, and give concessions to the marginalized groups; these include little government
and nadir obtrusion. The last metric incorporated in the “tax morale” set proteans on how
personal assenters discerned the “tax morale” of others, such as the social standard girdling
paying taxes.
The “fairness hypothesis” was evaluated utilizing several metrics. Additionally,
methodology impartiality was examined through asking assenters to outlay the Australian and
New Zealand tax system in terms of their performance. Two other measures were utilized in
assessing the degree to which Australian and New Zealand taxpayers supposed that they were

Comparing Tax Law in “Australia and New Zealand” 7
remunerating less than reasonable amounts, or more than their candid share than others. This was
evaluated through assessing the three group’s income rates.
The “work practice hypothesis” was examined through various metrics: a “tax
competence and independence index;” probability of obtaining a levy return; and proclivity for a
levy agent who was an “aggressive tax planner.” Conversely, the assenters were inquired about
their general connection with the Australian and New Zealand excise offices. The “cooperation-
resistance scale” contemplated the level to which “taxpayers” disapproved and validated “tax
office actions” within an allotment comprehension that the levy workroom has the legal
jurisdiction status. Besides, the “dissociation scale” computed the level to which assenters
challenged levy office jurisdiction either through disengagement, or tax avoidance. Thus, little
business people in both Australia and New Zealand have a greater chance to disengage, and
avoid tax payment, than salary and wage garnishees who have “income tax” extricated at source.
Questionnaire Design and Data Collection
The design used for sampling the data was using one item to classify assenters into
various categories about their employment. The former were asked “What kind of work do you
do? Please give your full job title and as much detail as you can. If you are retired or
unemployed, please describe your last regular paid job.” Then, assenters were asked, “Is that job
for (i) a private company or business; (ii) non-profit organisation e.g. university; (iii)
commonwealth, - 13 - state or local government; or (iv) are you self-employed, in a business
partnership, or do you own a business?”
Notably, the responses were recorded, while the grouped respondents working in a non-
profit organization and the Commonwealth, state, or local government were put in one category.

Comparing Tax Law in “Australia and New Zealand” 8
The other two categories were self-employed and private companies. From the three groups, it
was noted that self-employed (SBT) accounted for 244, those employed in non-profit
organizations accounted for 534, while private companies accounted for 785. Besides, the
“fairness hypothesis” was tested utilizing various metrics. Notably, “procedural justice” was
evaluated by asking assenters to rate the tax structure in “Australia and New Zealand”, while the
“working practice hypothesis” tests tax competence and independence index in both nations.
Analysis and Interpretation
The questions asked to the respondents was to assess their ability to pay taxes, and if the
levies imposed were reasonable. The comparisons between the tax structure in “Australia and
New Zealand” were conducted based on tax morale, fairness, work practice, and deterrence.
From the analysis made, Australia collects tax revenue from personal income tax, which
accounted for 47 per cent of total levies collected, while other taxes such as “corporate income
tax” accounted for 20 per cent, and GST accounted for 16 per cent. Contrary, in New Zealand,
the total income tax collected from the three groups accounted for 49 per cent of the total
revenue generated, while corporate tax accounted for 17 per cent, and GST accounted for 27 per
cent. Notably, New Zealand imposed a GST at a rate of 15 per cent (Freudenberg et al., 2012,
p.688).
The small enterprise taxpayers did not dissent massively from other categories in terms of
their standard of tax uprightness, or in terms of their fondness of obeying the legislation. Thus,
they considered tax payment a legal obligation that they must abide by. Small enterprise
allegiance to values linked with safety for the nation and community was lofty than those
working in government and non-profit sectors; the latter also prefer spending their taxes on
defence and policymaking. Additionally, they were more supportive of tax morale for re-

Comparing Tax Law in “Australia and New Zealand” 9
distribution of wealth through regulation and social justice programs compared to government
and non-profit sectors. Alternatively, small businesses approved the Australian and New
Zealand’s legislative efforts in using taxes to better the health care and education systems.
Small business taxpayers in New Zealand and Australia differ massively from both
government and “non-profit organization taxpayers” and “private sector taxpayers”. This
difference was brought about by the independence and competency in assembling their “income
tax returns”, and the probability of accepting levies refunds. Thus, small enterprise “taxpayers”
acknowledged that they had lower degrees of independence and competence in dealing with
excise matters, which mean they were less probable to get a tax return. Nevertheless, the mini
enterprise sector differs majorly from government and “non-profit organizations” in terms of
their high attraction to belligerent tax planners. Ahmed and Braithwaite (n.d) further assert,
“They liked the idea of having a tax agent who was creative and knowledgeable about aggressive
tax planning, but in this respect, they were no different from others employed in the private
sector” (p.19).
Findings
This study tests various theorems on the distinctiveness of mini enterprise “taxpayers” in
Australia and New Zealand in regards to their tax compliance; this links to their behaviors and
attitude towards tax payment. From the above analysis, it evident that the Australian and New
Zealand government have broken most tax jurisdictions into several business sectors; micro,
small, and large businesses. From the study, it is evident that psychological and attitudinal
factors are connected with the taxation non-compliance in the small enterprise sector. In contrast,
some findings indicate that small business taxpayers have similar attitudinal variables as other
taxpayers. This is evident as they have a common interest with salary and wage garnishees in the

Comparing Tax Law in “Australia and New Zealand”
10
private industry, and also they ration multiple views with salary and wage garnishees in the
public industry. The notable difference between the three groups is associated with tax activities,
tax morale, and work practices. Besides, small business taxpayers acknowledged that they were
more likely to evade tax, and expressing a keen interest in tax avoidance, and effective tax
planning.
The findings connect to tax morale were of interest in locutions of legislation-
abidingness, and reverence for authority. It was noted that small enterprise taxpayers were no
different from the non-profit and government taxpayers. Also, the latter were more aware of the
levy offices and the jurisdiction that could apply in eliciting compliance compared to the other
two groups. Ahmed and Braithwaite (n.d) note:
Differences in tax morale, however, become evident when the focus shifted from paying
tax as an obligation under the law to paying tax as a social obligation to society. The
argument for paying tax in western democracies is to contribute to the government’s
communal pot so that services can be universally provided as well as extra support as a
safety net for those in need. Ideologically, small business owners are less comfortable
with this arrangement than others (p.23).
Thus, they are more encouraging of the Australian and New Zealand government that never
interfere in the social and economic order, embracing independence values, and self-reliance.
Conclusion
Literacy of taxation laws is essential as the Australian public can understand how the
government needs to use the taxes they pay, and which attempts are being made by the
government to affiliate itself with its citizens. Notably, only literate people who have an
informed mind can make the choices that require government interventions such as healthcare,
and education. Alternatively, the business operations in New Zealand and Australia have a

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11
common of taxation; “Goods and Services Tax”. Notably, the tax systems of New Zealand tends
to differ from that of Australia. Thus, entrepreneurs working in both nations cannot use the same
tax reporting and enterprise strategies.

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References
Ahmed, E. and Braithwaite, V., n.d. Understanding small business taxpayers: Issues of
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Freudenberg, B., Tran-Nam, B., Karlinsky, S. and Gupta, R., 2012. A comparative analysis of
tax advisers' perception of small business tax law complexity: United States, Australia and New
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