Creating a fairer tax system

PhD candidate Amna Shah

Tax might not be everyone’s favourite topic, but for PhD student Amna Shah, combining her two passions – taxation and human behaviour – is a dream come true.

“Understanding why people do what they do has always fascinated me and I feel lucky that I’m able to incorporate this into my research,”  said Ms Shah, who is undertaking her PhD through Monash Business School's  Department of Business Law and Taxation.

Ms Shah's work aims to understand the psychological and sociological factors that influence tax compliance for the self-employed.

“I am particularly focusing on three significant psychosocial factors – tax communication, tax literacy and shaming,” she said.

Ms Shah said the boom in online businesses during the pandemic has exacerbated the problem of tax non-compliance.

“It’s not always easy for tax authorities to monitor all the transactions taking place online, hence individual or self-employed taxpayers have a greater opportunity to be non-compliant,” she said.

“As a result, governments are unable to meet their revenue targets, and rely on quick-fix policies to tackle the financial deficit – for instance, they end up introducing new taxes or increasing rates on existing taxes.”

Ms Shah said she hoped her research would help create a fairer taxation system for everyone.

“We’ve all come across news in the paper or on TV about influential individuals frequently cheating the tax system,” she said.

“Why should the common person bear the brunt of their noncompliance?

“By making recommendations for evidence-based, fairer and more viable policies, I am doing my bit to make the world a better place – hopefully!”

Ms Shah said her research would explore how the naming-and-shaming techniques used by tax authorities influence taxpayer behaviour.

“Does the fear of being named and shamed makes us responsible taxpayers or does it build ill will against the authorities that may lead to noncompliance?” she said.

“Once it is established how these factors may be significant in influencing our tax compliance decisions, the study will then examine how that understanding can be used to improve tax policies.”

The broad-reaching study will draw evidence from both Australia and Pakistan.

“By taking evidence from seemingly very different jurisdictions in terms of socioeconomic, cultural, and political setup, the study aims to present a holistic view,” she said.

Ms Shah's supervisor, Department of Business Law and Taxation Associate Professor John Bevacqua, said Amna’s work has international relevance.

“The policy instruments and advice she will be able to provide to tax policymakers around the world will be unique and cutting edge but grounded in approaches to public policy that are well-trodden territory in other fields,” he said.

“Her data collection, from both Pakistan and Australia, will provide a contrast, but also allow her to find that commonality that we have as humans in this field.”

Ms Shah said Monash Business School was an incredible platform for young researchers to showcase their work, share their research ideas, and receive feedback from experts.

“My incredible supervisors have always encouraged me to push my limits and given me confidence in my abilities as a researcher,” she said.

“I hope that my research makes a valuable contribution to literature as well as compliance policymaking throughout the world.”