The applicability of the OTS Complexity Index to comparative analysis between countries: Australia, New Zealand, Turkey, and the UK

BUDAK T. , James S.

EJOURNAL OF TAX RESEARCH, vol.14, no.2, pp.426-454, 2016 (Journal Indexed in ESCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 14 Issue: 2
  • Publication Date: 2016
  • Title of Journal : EJOURNAL OF TAX RESEARCH
  • Page Numbers: pp.426-454


Tax systems world-wide are becoming more complex for a variety of reasons. Countries such as Australia, New Zealand (NZ) and the UK have attempted to simplify their taxes but with limited success. The Complexity Index produced by the Office of Tax Simplification (OTS) in the UK is an important contribution in this field. This paper considers general issues in relation to complexity and simplification and then examines the usefulness of the OTS Complexity Index for making international comparisons by applying it to income tax and VAT or GST in Australia, NZ, Turkey and the UK. It finds some striking differences in the complexity of the taxes in these countries. For example, Turkey's score is much better in terms of total underlying complexity, whereas NZ's score is better in terms of total impact complexity for taxes. This paper provides evidence that identifies certain areas where the level of complexity might be unnecessarily high. It also finds that the OTS Complexity Index is not appropriate for international comparative analysis although it can be utilised to gather common data in different countries. This paper suggests that by creating an international index based on the OTS method would make a major contribution to the development of a new approach in tax simplification.