years preceding the study and that Europeans and Maori are more likely to know

Years preceding the study and that europeans and

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years preceding the study and that Europeans and Maori are more likely to know others who had evaded taxes. Though the Birch et al. (2003) research contributes to the existing sparse knowledge of ethnicity and tax compliance, it has some limitations. First, their student sample was heavily weighted towards 15 to 29 year olds which did not reflect the New Zealand population (Statistics New Zealand, 2001) and therefore students in this sample are not representatives for actual taxpayers, due to their age differences from actual taxpayers (Cuccia, 1994; Yong, 2006). There are claims that students do not behave differently from non-students in experimental research (Alm, 2011; Alm, Bloomquist, & McKee, 2010; Alm & Jacobson, 2007). However, others argue that student findings from these methods lacked realism and had low external validity. This is because real factors such as social stigma of jail time and financial losses cannot be modelled in experimental research (Levitt & List, 2007). In addition, Gerxhani and Schram (2006) discovered that students behaved differently from non-students, are comparatively less compliant and they take more risks than non-students. Second, the Birch et al. (2003) student sample was heavily weighted towards Europeans and Chinese and had insufficient representation from the Maori and Pacific groups as they were and are generally under-represented in accounting and taxation courses (Ministry of Pacific Island Affairs & Statistics New Zealand, 2002; NZIER, 2007; Statistics New Zealand, 2010a). An intra-cultural Malaysian study on ethnicity and tax evasion attitudes was undertaken by Kasipillai and Abdul-Jabbar (2006) on Malay, Chinese, and Indians taxpayers, and their survey revealed “no significant differences among ethnic groups on the overall noncompliance attitude” (p. 85). Though this study adds to the literature on ethnicity and tax noncompliance, there are some gaps which need mentioning. First, they ascertain a taxpayer’s noncompliance attitude is based solely on hypothetical scenarios which may not reflect the actual situations faced by taxpayers. Second, their focus is on tax noncompliance attitudes which may not be translated to actual behaviours, since
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19 Elffers (2000) claims that “not everyone with an inclination to dodge his taxes is able to translate his intention into action” (p. 187). In a similar vein, Loo and McKerchar (2011) surveyed a random sample of 600 Malay, Chinese, Indian, and “other” taxpayers in Malaysia between January to June 2010 to ascertain whether ethnicity affects tax fairness perceptions. With a response rate of 23.8 percent (143 usable responses), they find that ethnicity is significantly correlated to risk personality and tax fairness perceptions. They indicate that “the relationship between ethnicity and tax fairness could indirectly affect tax compliance, even though a direct relationship was not found between ethnicity and tax compliance” (Loo & McKerchar, 2011, p. 16) which confirms the earlier findings from Kasipillai and Abdul-Jabbar (2006). However, another study shows that tax education in relation to personal tax
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  • tax compliance, SME Operators

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