Dashboard Day 3 – Customer Behaviour Analysis for Individual Tax Preparation Companies

Today is dashboard week day 3, our topic today is very exciting – TAX!

Data Introduction

The data we got is from the ATO and it shows the income and tax status of Australian individuals, companies, partnerships, trusts, and funds for 2018-19. Some tables also have data from previous years (from 2010 to 2017 financial years).

There are more than 40 tables of 5 categories, from which I chose the easiest and most interesting one: individual tax table.

Data Preparation

During the financial year of 2010, e-tax type was used. I’m not sure if they were doing by themselves or through an agent, so I just filtered the data set so that the years with only two lodgment methods (agent and self-prepared) remain.

Dashboard (Interactive Viz)

The background story of the dashboard is as if I am consulting an individual tax preparation company (H&R Block for example), what information should I provide to these tax agents to help them to locate their target customers and make informative decisions.

Below are 3 core components to my dashboard:

• Tax agent popularity by age group and over the time

• Location analysis based on tax agent popularity and their spending capacity
• Customers’ spending capacity by age group and over the time

Interesting findings:

1. People who use tax agents to lodge their tax returns have an average spending of $768 donations while people who lodge the tax returns by themselves only spend $430 per person when it comes to gift and donations. The charity events can be a good place to do advertisement for tax agent companies.
2. People who have rental properties are more likely to go with tax agents. For the people who use tax agents, 19.3% have rental properties while only 5.8% people who lodge the returns by themselves have rental properties.
3. As people are getting older, they are more likely to use agents to lodge the tax return. Maybe they will have more complicated tax elements including rental properties, FBT, interest income and others.

Reflections

Good Aspects:

Very good timeboxing, finished dashboard and the blog within business hours.

Put myself into a Tax Agent’s shoes and found a story to tell.

Things to improve:

Could be better if I can add supplementary data showing the rental property rate by suburb to help the tax agents find their target clients.

It would be interesting to see how covid affect the individual tax status as the deduction rules have been adjusted. More people start to work from home and claim more work-related expense. Maybe more people will have time to lodge the tax returns by themselves since Melbourne was in lockdown in 2020 tax season (July 2020 to Oct 2020).