Collaborative Tax Regulation: Can Consumers be Engaged as Partners in the Regulatory Craft?

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This article shows a new form of regulation within a tax administration where tax administrators abate tax evasion by nudging and motivating consumers to only purchase services from tax compliant businesses. This indirectly closes or forces tax evading businesses to change their practices, because their customer bases decline to commercially non-viable levels. The analysis is framed by public governance literature and argues that the regulation is an example of collaborative or interactive governance, because the tax administrators do not regulate non-compliance directly, but activate external stakeholders, i.e. the consumers, in the regulatory craft. The study is based on a qualitative methodology and draws on a unique case of regulation in the cleaning sector. This sector is at high risk of tax evasion and human exploitation of vulnerable workers operating in the informal economy. The article has implications for how tax practitioners think about collaborative and interactive regulatory initiatives. While the tax administration in the study sees the approach as effective, the analysis shows that there are a number of caveats in relation to regularity, public listing, costs and revenue focus. The article thus links a concrete case of new regulation in tax administration to broader theoretical discussions of collaboration and interactive governance within public administration, and the article problematizes this regulation. This provides a vantage point from which constructive dialogue about new regulatory practice can emerge.
Original languageEnglish
JournalJournal of Tax Administration
Issue number2
Pages (from-to)4-23
Publication statusPublished - 2016

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