Exploring individual taxpayer's perceptions of tax complexity

Abstract

Generally, tax systems are perceived to be complex. This study takes a qualitative empirical approach to examine individual taxpayers’ perceptions of tax complexity. This was achieved by obtaining individual taxpayers perceptions on the complexity of the tax system. The study also investigates whether taxpayers perceive that their tax burden is influenced by the complexity of the tax system and also analyses suggestions by respondents on how the South African tax system can be simplified.

The findings are that not all taxpayers perceive that the tax system is complex. These respondents mainly acknowledge the various means available, such as e-filing, to counter the effects of tax complexity. They also point out that taxpayers should be responsible for educating themselves on how the tax system works.

However, there are more people who believe that the tax system is complex. The complexity is mainly attributed to the challenges taxpayers face in attempting to comply with tax legislation. These challenges include difficulties in keeping up to date with constant changes to legislation, the fear of filing an inaccurate tax return and the general lack of adequate knowledge to confidently handle one’s tax affairs. An interesting theme emerged on how respondents make the presumption that the tax system might be complex for other taxpayers due to a lack of education or knowledge of the tax system.

The study concludes that perceptions of tax complexity seem to be influenced by complexities in tax legislation, user needs as well as user abilities. Recommendations are made for further studies to assess taxpayers’ tax literacy levels. These studies may also investigate taxpayers’ awareness of their rights and obligations under tax laws