or by the IRD was perceived as problematic or to punish them for their

Or by the ird was perceived as problematic or to

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or by the IRD was perceived as problematic, or to punish them for their noncompliance behaviours. Their high power distance values, reinforced by historical oppressive colonial governments, made them view the IRD unfavourably, as they could wield excessive powers to enforce compliance. Their fear of the IRD forced some to operate below the registration threshold and in the cash economy. Hence this adds to the existing tax literature that for some ethnic groups the fear of tax authorities was related to historical factors, compounded by their high power distance cultural values. In addition, some operate in the cash economy to avoid interacting with the IRD, and not merely to evade taxes. 7.3.2 European operators’ perceptions of the IRD Like the Maori, European operators showed some apprehension towards the IRD but their apprehension was due to their low tax knowledge. Despite their low power distance values, only one European operator used the IRD as their main source of tax assistance. The reluctance of European operators to contact the IRD was attributable to their individualistic traits and their lack of trust towards the IRD: “I have not used the IRD website as it is too scary and too crazy. You cannot find any information in layman’s terms, and when you call them, they are like the police as they treat you like a criminal as if you have done something wrong.” (E1) “I would not like the IRD to come and visit me because their interest is not with my business. Tax is their core business and there would be a conflict of interest as they would advise me contrary to my business interest. I want the tax man to stay away.” (E8) “SME operators have mistrust towards the IRD that the IRD is not necessarily working for them. They perceived the IRD to be collecting taxes and that the IRD will not be proactive in showing them how to minimise tax for their business.” (TP8) Europeans, with their culture of masculinity traits (see Chapter 4, section 4.5.5.), perceived the IRD to undertake their tax collection function by collecting as much tax as possible from them. Their individualistic and cultural values of masculinity resulted in a greater dislike towards the IRD, as the IRD had the means to audit and penalise them for inaccurate tax returns. This is similar to the findings that SMEs in New Zealand and
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119 Australia perceived an adversarial relationship with the tax authority (Coleman & Freeman, 1994; Noble, 2000). With this, it adds to the existing tax literature that cultural values can help explain the level of interaction SME operators choose to have with the tax authorities and their perceptions of them. 7.3.3 Asian operators’ perceptions of the IRD The main reason Asians in this sample were reluctant to contact the IRD was largely due to inexpedient telephone services offered by IRD staff, as experienced by A4, A6, A7 and A9. To them, it was more cost effective to seek help from peers and accountants than to wait for the IRD responses. Contact with the IRD by the two Asian operators in
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  • Fall '16
  • tax compliance, SME Operators

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