evasion has more impact on Indian than Malays and Chinese taxpayers Kasipillai

Evasion has more impact on indian than malays and

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evasion has more impact on Indian than Malays and Chinese taxpayers (Kasipillai, Aripin, & Amran, 2003). Hence these intra-cultural studies show that tax behaviours can differ between ethnic groups within the country. To address their research limitations, Birch et al. (2003) suggest “the mix of respondents [be] broadened in order to more closely represent the New Zealand population and further data to be collected to explore the underlying reasons behind taxpayers’ responses” (p. 96). Given that, it may be fruitful to consider actual taxpayers from representative ethnic groups, using different research methodology, and by broadening the research focus to incorporate the process of what taxpayers actually do to comply, and not be limited to tax evasion attitudes. 2.4 Culture and tax compliance on taxpayer and student samples The influence of culture on one’s behaviour is recognised as important, as “culture bridges the tension between individuals and the social group, and hinges on learned institutions and their underpinned values” (Kasper & Streit, 1999, p. 162). In comparison to other tax compliance factors, little is known of ethnicity and tax compliance, and the “effects of different ethnic background on compliance attitudes is an emerging trend in tax compliance literature” (Birch et al., 2003, p. 95). As shown in the next subsection, the majority of the tax research on culture is largely cross-cultural between countries, with a strong emphasis on tax evasion attitudes.
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20 2.4.1 Cross-cultural research There have been several research reports linking culture to tax evasion attitudes between countries. The survey study undertaken by Alm and Torgler (2006) finds that tax morale is higher in the United States than in Spain and that the United States and Switzerland have higher tax morale relative to other European countries. They attribute the differences to cultural differences caused by institutional and political differences, trust in government, and the fiscal exchange between the taxpayers and government. Similarly, Cummings et al. (2004) discovered that tax compliance behaviour differences between the United States, Botswana, and South Africa are due to cultural differences in the perceived fairness of tax administration, the perceived fiscal exchange between the taxpayers and government, and the taxpayers’ overall attitudes towards government. Other cross-country tax research was undertaken by Frey and Weck-Hannemann (1984) who compare survey results from 1960 to 1978 to identify each country’s level of “tax immorality” (tax evasion) index. They attribute a median rank to the United States, Canada, Japan, and Ireland, which lie between Scandinavian countries, Britain, the Netherlands, and the German speaking countries, whereas Romanic countries such as France, Italy, and Spain have higher tax immorality indices than most other countries.
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  • Fall '16
  • tax compliance, SME Operators

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