Market Research Helps Inland Revenue Improve ServiceRevenue
Revenue Minister Bill English said today Inland Revenue Department took seriously the job of finding what problems taxpayers have with its services and how to improve its performance.
Mr English released a number of the Department's market research reports, along with a schedule of research over the last four years, under the Official Information Act.
"Inland Revenue has an extensive market research programme each year.
"Over the years this research has been used to find out what taxpayers think of Inland Revenue, what problems they are having with services and to measure the effectiveness of advertising and promotional campaigns. This information has been used to improve services and produce better information for taxpayers.
"A report on tax and the small business owner has confirmed the importance of the current work around simplifying both tax legislation and tax return completion.
"Research like this does produce a wide range of responses from people, but even the most negative responses can be useful for improving performance.
"Two early reports, in 1986 and 1989, identified fairly high dissatisfaction with Inland Revenue's service. Later research shows the department has made significant improvements.
"Research in 1994 showed that Inland Revenue's service was considered better than most other government departments and on a par with other service agencies. The department's latest taxpayer satisfaction survey shows that 74 percent of people give the Department an overall satisfaction rating of good or better.
"Results from a survey early last year of people who had missed their Child Support payments showed that factors outside Inland Revenue's control were the most important barriers to paying. Of those surveyed, 83 percent mentioned financial problems as a factor discouraging paying, and 74 percent thought they had been treated unfairly in relation to their ex-partner.
"A number of improvements in Child Support services in the areas of staff development, education, systems, and changes to legislation have been made as a result of the survey.
"The report on small business owners showed that the taxes seen to be the most difficult to work out were Provisional Tax and Terminal Tax. The taxes perceived as the least necessary and the least fair were the Fringe Benefit Tax and ACC levies.
"The small business owners who rated a tax as more difficult also spent more time on it and rated it as more unfair and unnecessary," said Mr English.
Ends For further information contact:
Liz Rowe, Press Secretary, 04-471 9154 (wk) or 04-383 5491 (hm)
Notes about the reports
Advertising Communications Tracking (Reports 1990, 1991, 1993, 1994) and Inland Revenue Media and Image Evaluation (Reports February and June 1996) - CM Research
This research has been conducted over a six year period from May 1990 to June 1996. The research initially focused on the advertising effectiveness of the "7s" return campaign and the publics' general attitudes to Inland Revenue and how easy the tax completion process is. The research was expanded in 1993 to include a question on who completes the respondents' tax return. The 1996 research also focused on the Family Support campaign.
Over the length of the "7s" return campaign there were high levels of advertising recall (45 - 60 percent) and high levels of message takeout (40-60 percent).
Very high levels of recall for the impending tax date - peaks for each different tax type (range from 40-70 percent for major taxes IR5, IR3, IR4, provisional).
High awareness of the 0800 number introduced in 1996 (51 percent) - this shows effective advertising - about 6 percent of the public used the number, most wanting a tax pack.
Attitudes to Inland Revenue have developed in some areas over the 6 year period
Difficulty remembering date returns due - drops from 41 - 31 percent from 1990-1996.
IRD provides enough information about tax - up from 60 to 71 percent over 1990-1996 period.
Helping the public by providing reminder - constant between 75-85 percent.
Trigger for me get tax affairs completed - constant around mid 50s.
IRD lives up to job to be fair - constant around mid to low 50s.
Tax instructions easy to follow - constant around mid 60s.
About 40 percent of taxpayers complete their own forms, with 18 percent having a family member do it for them.
Family Support campaign had moderate recall at 24 percent, high recall and use of 0800 number at the end of advertisement. This use shows the advertisement successfully appealed to target demographic audience.
DDI Telephone Customer Service and Satisfaction Evaluation (1994). CM Research
This research was part of the monitoring programme run by Inland Revenue in 1994 for customer satisfaction. It had built on the programme run from 1991-1994.
The key findings relate to the comparison between Inland Revenue and other government departments and other service agencies.
Inland Revenue verse other Government departments
Inland Revenue verse other Service Agencies
Public Image of Inland Revenue - An Attitudinal Survey (1986), Attitudinal Study: A Qualitative Study of the Image and Publicity of the Inland Revenue Department of New Zealand (1989) - McComish Research Ltd.
These two reports conducted into the attitudes that taxpayers had towards Inland Revenue. They are the first two major studies in this area, and show how the department changed over the three-year period. They focus on providing an in-depth qualitative picture of how taxpayers saw Inland Revenue in the late 1980s. The second report builds on the findings of the first, reviewing its results and covering new areas.
The 1986 Public Image survey results portrays Inland Revenue in a negative light. The report contains a number negative of comments about how Inland Revenue was seen in 1986 as a "bureaucratic, tired, regimented" organisation. The report also states that when taxpayers contacted Inland Revenue its staff had little concern for taxpayer privacy, lacked training and that there was little recourse available if problems arose.
The 1989 Attitudinal Survey reviews the findings of the 1986 report and finds that Inland Revenue has improved its service in a number of key areas, but that there are significant areas where Inland Revenue can still improve its service.
The current customer satisfaction survey results for the key issues of; ease of contact, staff knowledge, staff giving understandable answers, being courteous and speed of enquiry are listed below.
Results 1998 Year Overall Satisfaction:
Staff quality: Good or better
74 % Poor or worse
Easy to contact 75% 14%
Knowledgeable 78% 11%
Courteous 79% 11%
Time to answer enquiry 67% 21%
Giving understandable answers 81% 9%
Liable Parent - Qualitative. Prepared for Child Support by Colmar Brunton February 1998
Inland Revenue wished to address the problem of parents who were not complying with their Child Support obligations by developing a programme aimed at improving levels of voluntary compliance. Currently over $250 million dollars is outstanding in liable parent payments.
some respondents indicated that they experienced receiving bad customer service. They felt that they were not listened to, not treated as an individual, did not receive correct data, and did not receive punctual replies to phone or mail correspondence
some respondents felt that they were not treated with care and respect by Child Support staff
some respondents felt that the level of payment was not fair
83 percent of those surveyed mentioned financial problems as being factors that discourage compliance.
74 percent of those surveyed felt that they were treated unfairly in relation to the ex-partner, both financially and emotionally.
Tax and the Small Business Owner: Is it a Fair Relationship? Mackenzie, A., & Kemp, S. (1998).
This paper was intended to provide the Inland Revenue with information on small business owners' perceptions of the taxes that they have to pay. Research of this nature needs to be completed regularly to ensure that Inland Revenue's practices keep pace with those of the small business community.
The taxes perceived as most difficult to work out were Provisional Tax and Terminal Tax.
The taxes perceived as the least necessary were Fringe Benefit Tax and ACC levies.
The taxes perceived as the least fair were Fringe Benefit Tax and ACC levies.
The taxes that were perceived as requiring the most unfair amount of time to work out were ACC levies and Provisional Tax.
The small business owners, who rated a tax as more difficult, also rated it as more unfair, unnecessary, and spent more time on it.
Overall, Fringe Benefit Tax, ACC levies and Provisional Tax were perceived as unfair and unnecessary, while Terminal Tax, GST and PAYE were seen as fair and necessary. Instead of being dependent on the amount paid, these perceptions appeared to be determined by whether an accountant was employed, a profit was made and business growth.
Impact of Penalties and Charges on Business Compliance (Quantitative Report), 30 October 1997. Business Non-Compliers tax Behaviour Changes Due to New Compliance and Penalties Regime (Qualitative Report), 26 August 1997. Colmar-Brunton Ltd.
This research aims to provide an understanding of taxpayer attitudes and the impacts of the new Compliance and Penalties regime on those attitudes.
Key Findings (Qualitative Research: August 1997)
Justifications for non-compliance were
Considered tax payments a low priority especially if they were short of funds.
Slap happy business approach and genuine oversights.
Ambiguity of tax legislation.
Lack of experience, leading to Lack of Control (reliance on others, accountants).
They consider it their money and are not willing to hand it over as they perceive little risk of being caught.
Attitude to Customer Service
Businesses want a greater customer focus with designated account managers, with customer differences recognised.
All areas experienced difficulties with the phone system, staff numbers and turnover.
Poor communication from Inland Revenue on existing flexible options for customers.
Inland Revenue is perceived as inflexible and uncaring. Customers suggest that this could be improved through better communication of existing services.
Key findings (Quantitative Research: September 1997)
Potential business non-compliers perceive their tax obligations are to pay the tax they are liable for. They do not think of these obligations in terms of filing on time, paying on time or correctly determining the amount to pay. 45% of potential non-compliers had little knowledge of the tax system with 55% admitting to quite a lot of knowledge or better.
83% of potential business non-compliers claim to have heard about the new rules and penalties. Their knowledge is general and in some instances incorrect. Specific details relating to the new penalty regime is very limited.
16% of those liable for periodic returns claim that penalties and charges have had a major impact on the way their business prepares and pays tax for their periodic returns. A further 19% claim it has had some impact (a total of 35%).
Taxpayer Audit Programme (Reports 18 & 25 June 1992; 2 & 9 November 1992). C. M. Research Associates.
This research aimed to evaluate the Taxpayer Audit Programme as it existed in 1992.
Audits performed in given groupings will have a ripple effect.
The most effective way of achieving visibility is to maintain an audit presence in all groups of taxpayers.
Most taxpayers comply voluntarily with their obligations. However, this compliance behaviour differed between the target groups.
A portion of the population are non-compliant due to deliberate or unintentional errors or technical adjustments resulting from differences in the interpretation of the tax laws.
Salary and Wage earners, those in small businesses and corporate clients all felt Inland Revenue to be inefficient and bureaucratic and poor at communicating its requirements to taxpayers.
Inland Revenue staff were thought not to be of a particularly high calibre.