Grapevine

By Phys
Sep 30, 2024

Rounding up: How our research used round numbers to zero in on tax evasion

Australia's tax system is needlessly complex, and that's making it costly in ways that aren't obvious.

New research from our team at the Australian National University's Tax and Transfer Policy Institute, in the Journal of Public Economics, has identified one of the unexpected ways it is wasting our time, and found pretty clear evidence of tax evasion along the way—evidence the Tax Office will be able to use.

Here's what we did.

Examining 27 years of de-identified individual tax files, we noticed a striking number of returns generating "round number" refunds.

By "round number," I mean refunds whose last digit is zero.