The Asian SME operators who participated in this research showed the least

The asian sme operators who participated in this

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greater reverence and fear towards the tax authority and tax practitioners. The Asian SME operators who participated in this research showed the least difficulty with filing their tax returns and paying their taxes on time, whereas the Europeans experienced some difficulties and the Maori and Pacific SME operators encountered the most problems. Given that, tax compliance activity can no longer be thought of as culturally neutral, as is assumed in some tax compliance research.
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xiii Since Hofstede’s work was based on a quantitative methodology, the qualitative design of this study aimed to validate and understand Hofstede’s dimensions in the tax compliance context for SME operators intra-culturally. The qualitative approach generated rich content in terms of providing real tax compliance stories, perceptions and experiences that highlighted some difficulties created by cultural incompatibility with the New Zealand tax requirements. The study also offers suggestions to the tax authority, policy makers and business community to reduce the likelihood of noncompliance amongst SMEs. In order to comply with the tax regulations, there is a need for SME operators to modify and adapt their cultural values to align with the tax requirements, as failure to do so will result in tax compliance difficulties. In addition, the tax authorities also need to be culturally aware that some ethnic groups may have difficulties complying due to their cultural values, thereby requiring targeted assistance and monitoring measures.
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1 CHAPTER 1: Introduction 1.1 Overview This thesis examines the cultural influences on the tax compliance behaviours of ethnic SME operators in New Zealand by using Hofstede’s (2001) theoretical framework. The knowledge gained from this research should inform the efforts of tax regulators, government agencies, and policy makers to more effectively target their regulatory measures and assistance programs towards SMEs. This is particularly relevant given the increasing cultural diversity in most Organisation for Economic Co-operation and Development (OECD) countries including New Zealand. As shown in Appendix 1, New Zealand is culturally diverse with ethnicities of European, Maori, Asian, Pacific Peoples and “others”. People from similar origin, geographical areas and regions are categorised into these broad ethnic groups (Macpherson, 2001; Pio, 2010), which follows what commonly occurs in most government censuses (Ogden, Ogden, & Schau, 2004). Statistics New Zealand defines ethnicity as a measurement of cultural affiliations (Statistics New Zealand, 2011). Culture determines the identity of human groups (Hofstede, 1980) and ethnicities are cultural groups with a set of shared values, beliefs, and norms to solve basic human problems (Basu & Altinay, 2002; Hampden-Turner & Trompenaars, 1996). The importance of cultural diversity is also reflected in the ethnic SME business ownership, shown later in Table 1.1 in section 1.3.
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  • Fall '16
  • tax compliance, SME Operators

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