Abstract

There is little prior research on benchmarking in indirect tax administration, particularly in the area of audit enforcement. This article contributes to the literature by reporting the findings from two questionnaire-based studies undertaken in the United Kingdom and Australia to analyse current issues surrounding VAT visits (United Kingdom) and GST audits (Australia). The findings from the United Kingdom suggest that there is agreement that VAT visits are efficient, fair, consistent and desirable in ensuring the integrity of the VAT system. There was also general agreement that VAT visits do not damage relationships between taxpayers, tax advisers and tax agency staff, and that educational visits are beneficial for new businesses. In contrast, Australian tax advisers were less likely to agree that tax audits were efficient and fair and Australian tax advisers are much more concerned about the potential damage that audits can inflict on working relationships. However, Australian tax advisers concurred with their UK counterparts in that they consider tax audits are desirable and necessary within a self-assessment regime, in order to ensure the integrity of the tax system. Overall, our study suggests that revenue agencies can learn from each others' experiences through benchmarking administrative practices with the audit enforcement area being a particularly good starting point.