payments interactions with the tax authorities interactions with tax

Payments interactions with the tax authorities

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payments, interactions with the tax authorities, interactions with tax practitioners and compliance cost were included. Several attempts to link ethnicity of business taxpayers to tax noncompliance (tax evasion) have been undertaken but there are gaps in understanding what ethnic operators do in terms of filing tax returns and paying their taxes on time (Torgler, 2007). With this, it is appropriate to discuss the cultural values of the different ethnic SME groups such as those found in New Zealand in the next chapter.
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33 CHAPTER 3: Cultural Diversity of New Zealand SME Operators 3.1 Introduction This chapter discusses the cultural values of the four largest ethnic groups in New Zealand namely the European, Maori, Asian and Pacific Peoples. The cultural diversity in most OECD countries including New Zealand serves as a catalyst to study ethnicity of SME operators and their tax compliance behaviours. This chapter brings together literature pertaining to the influence of culture on business practices including tax compliance. The discussion begins by examining the cultural differences of the ethnic groups in section 3.2. Section 3.3 outlines the impact of cultural differences on business behaviours. Section 3.4 discusses the European cultural values and tax compliance. Sections 3.5, 3.6 and 3.7 detail the cultural values of Maori, Pacific and Asian and tax compliance respectively. The final part provides a summary of the chapter in section 3.8. 3.2 Cultural differences of New Zealand SME groups The cultural diversity of New Zealand is reflective of the changing trend experienced by other nations brought on by globalisation (Stahl, Miller, & Tung, 2002) and lax immigration and emigration barriers (Johnston, 1991). Nations are becoming more diverse and “virtually every nation state of the world is a multicultural one made up of a number of groups” (Naylor, 1996, p. 93). Like most OECD countries, there are four dominant ethnic groups in New Zealand namely the European, Maori, Asian, and Pacific Peoples. This research focuses on these four ethnic groups given their high population numbers and percentage of business ownership since 2001. Of the four ethnic groups, the Pacific Peoples and Asians are the more recent migrants compared to Europeans (Anglo-Saxon decent) who arrived in the nineteenth century and Maori who are the indigenous people
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34 (Henry, 2007; Pio, 2010). Some ethnic groups exhibit certain values and rituals (Hofstede, 1980), such as a majority of Pacific Peoples are affiliated to a traditional church (Statistics New Zealand, 2010b). The church is where “language and culture is regularly practiced” (Tu'inukuafe, 1996, p. 211) and it is the central means of providing “an embodiment of Pacific knowledge and [it enhances] Pacific cultures by becoming a mirror image of village life in the Islands” (Tiatia, 1998, p. 7). Although Pacific Peoples over the past fifty years have migrated to countries such as New Zealand, Australia and the United States, they are resilient in keeping their own culture (Prescott, 2009). For
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  • tax compliance, SME Operators

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