The contribution to the literature that this study makes can be divided into

The contribution to the literature that this study

This preview shows page 169 - 171 out of 241 pages.

compliance. The contribution to the literature that this study makes can be divided into three categories. The first is its empirical contribution to the SME tax compliance literature, by application of an intra-cultural study on ethnicity, using Hofstede’s (2001) framework. The second is to add to the currently sparse qualitative tax research on SMEs by incorporating the constructivist-interpretivist perspective. The third contribution is towards policy and practice recommendations for government agencies, the business community, tax practitioners, and ethnic operators to identify ways to improve SMEs’ tax compliance. 9.3 Contributions to tax compliance research on SMEs The empirical contribution this research makes towards the tax literature is to include ethnicity as a contextual factor to explain the differences in SME operators’ tax
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156 compliance behaviours and perceptions. Instead of concentrating on the tax evasion perceptions, this thesis examines what ethnic SME operators do to comply and the process they undertake to discharge their tax obligations. Understanding the cultural values brought about by ethnicity has provided another facet of compliance and helps to inform tax regulators, the business community and tax practitioners how best to assist culturally diverse taxpayers, as they differ in their approach, priority and intensity towards tax compliance. With this knowledge, tax authorities are better informed of the cultural nuances that can influence tax compliance behaviours and can find ways to meet the needs and expectations of the ethnic groups. This intra-cultural study is relevant not only for New Zealand but also for other tax jurisdictions with culturally diverse taxpayers such as Malaysia, Australia, United Kingdom, Western Europe, Canada and the United States of America. With self assessment tax regimes, it is likely that similar tax compliance issues will arise in these countries, given their multicultural taxpayers. The findings from this study will help inform these international tax jurisdictions of the process with which to acculturate, assist, regulate and encourage compliance. This study found that some noncompliance behaviour of the ethnic groups is not always in order to cheat on their taxes but because they do not understand the tax compliance requirements, due to their belief systems and low tax knowledge. For some, external pressures from extended families, churches and collective groups can also hinder their ability to comply successfully. 9.3.1 Cultural values and tax compliance of SME operators As shown in the findings (see Chapters 6 to 8), the tax compliance behaviours of the ethnic groups reflected their cultural values and the way they organised themselves socially. Cultural values acted as a powerful and invisible hand in shaping their record keeping responsibility, sources of tax help used, perceptions towards taxes, tax spending, and IRD and audit experiences. For some ethnic groups, their cultural values
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  • Fall '16
  • tax compliance, SME Operators

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