158 assistance Hence the individualism collectivism values could enhance or

158 assistance hence the individualism collectivism

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158 assistance. Hence, the individualism-collectivism values could enhance or hinder successful tax compliance depending on whether the benefits of belonging to the group outweigh the costs of membership. Targeted education in terms of financial literacy and cash flow management is needed for collectivistic groups who are obliged to fulfil group requirements but do not have access to in-group’s resources to assist with their tax compliance. Finally, business networks with mentors who are knowledgeable in tax issues should be encouraged for both collectivistic and individualistic cultures, to help reduce their reliance on paid tax assistance. The Europeans and Asians in this study, as cultures displaying characteristics of masculinity, were more committed to completing the tax compliance tasks required of them, whereas the Pacific and Maori sample, with less masculine cultural values, emphasised relationship building and therefore tax compliance activities were not given the priority or interest. Europeans and Asians with more masculine cultural values were performance oriented and showed greater dissatisfaction towards welfare spending, compared to the Pacific and Maori samples that were more welfare oriented. Given that, those with masculinity cultural values are more predisposed to completing their tax compliance obligations and therefore there is a greater need for government intervention in terms of accounting training for the non-masculinity cultures to improve their ability to complete tax compliance activities. 9.3.2 Theoretical and empirical contributions of this research While Hofstede’s (2001) framework was based on a quantitative methodology, the qualitative design of this study aimed to validate and understand Hofstede’s (2001) dimensions in the tax compliance context of ethnic SMEs. This study contributes to theory in intra-cultural research, as this study shows that Hofstede’s (2001) framework can be used to explain the tax compliance differences intra-culturally (within one tax jurisdiction), instead of cross-culturally (between tax jurisdictions). This qualitative intra-cultural study provides insights into the complex social processes which constitute the contextual variability for tax compliance, which is often overlooked in quantitative tax research. It also suggests that tax compliance activity cannot be seen as culturally neutral, as has previously been assumed by most tax researchers and regulators. The qualitative study uncovers more specific information about the ethnic groups’ ability to comply with the tax regulations, especially in the area of family and
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159 community obligations. This could provide a basis from which to improve existing training programmes, allowing trainers to target specific concerns and compliance issues. The relationship between the ethnic operators and their extended families, networks and community, is another area with robust potential for future tax compliance research. Determining the types of influences and how they affect the ethnic operators’
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  • Fall '16
  • tax compliance, SME Operators

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