Financial and tax literacy

Tax clinics and tax literacy

A key objective of the program is to educate the public about the tax system and enhance their tax literacy.

Tax literacy can be defined as ‘a combination of the knowledge, skills and attitudes that individuals require to gather the necessary information to determine their tax liability, to be tax compliant and to conduct effective tax planning. It furthermore includes a sense of responsibility towards the objectives of the social contract, which requires active participation by the citizenry and a high degree of tax morality.

Limited financial and tax literacy is one of the top 3 factors contributing to tax non-compliance, particularly among vulnerable populations in the program. These challenges are worsened by the broader difficulties our clients face. Tax clinics provide vital support by helping taxpayers:

• navigate ATO systems for lodgment
• complete sections of their income tax returns and goods and services tax (GST) returns
• understand tax laws and their implications
• maintain accurate financial records
• use digital tools, such as Excel, to summarise transactions for tax lodgment
• comply with tax obligations through general advice
• download relevant information from banking websites and import into software to prepare statements and returns
• calculate tax deductions, especially for those with limited numeracy skills.

While most tax clinic clients lack financial and tax literacy in some form, in 2024, tax clinics assisted 297 clients with specific tax literacy issues, dedicating a total of 791 work hours to addressing their unique challenges and supporting them in meeting their tax obligations.

Given the time and funding limitations of tax clinics, improving tax and financial literacy in the community is essential, as ongoing individual support is not always feasible. In 2024, this was addressed through workshops for community groups, secondary schools, university organisations, and trade centres. These sessions provided foundational knowledge to help participants understand their tax obligations and identify when to seek assistance.

Tailored workshops covering tax, superannuation, salary sacrifice, investments, separation and divorce were delivered to groups of individual taxpayers including:

• migrants and refugees
• tradespeople
• graduating high school students
• performing artists
• university students.

Workshops covering topics including income tax, GST, superannuation, business structures and cashflow management were delivered to groups of small business taxpayers, sole traders and workers in the gig economy.

These efforts highlight the program’s commitment to fostering strong community connections and ensuring equitable access to essential services. By reaching diverse community spaces, the program continues to enhance financial and tax literacy, encourage voluntary compliance, and support the economic well-being of those at risk of exclusion from the tax system.

Beyond delivering a valuable service to the community, we also provided students with real-world experience, allowing them to engage with actual clients in a boutique tax practice setting.

Case study: the power of being heard Client B came to the University of Tasmania (UTAS) Tax Clinic seeking help with what, on the surface, was a simple task: updating his personal details with the ATO. However, his circumstances revealed far deeper challenges. Having spent 7years in prison and living with a brain injury, he found it difficult to read or comprehend lengthy documents. His past experiences had left him feeling judged, overlooked, and excluded from services that others might take for granted. With patience and empathy, our team supported him through the process. While the task itself wasn’t technically complex, it carried enormous personal significance. For the first time in a long time, the client felt heard, respected, and supported. This experience was a powerful reminder that effective tax support goes far beyond technical correctness. It’s about listening, showing compassion, and meeting people where they are. In that moment, it wasn’t just about tax – it was about dignity.

Case study: Tasmanian financial literacy initiative In parallel with clinical services, the UTAS Tax Clinic is spearheading (under the leadership of tax clinic Director – Donovan Castelyn) a $500,000 financial literacy initiative on the west coast of Tasmania (funded by the Tasmanian Community Fund and Bank of Us), aimed at children and their families. This initiative builds on the success of the tax clinic and relies on partnerships with schools, libraries, local councils, and social services to embed long-term, community-led financial capability. This includes: Integration of resources and training into school curriculums Pop-up clinics and community education Collaboration with psychology services to address the mental health impacts of financial stress Development of plain-English guides and community-led train-the-trainer models This project builds on the clinic’s outreach expertise and aligns closely with Tasmanian priorities around regional development, economic empowerment, and reducing barriers to education and employment.