Collectivism allowed them greater access to free tax information and financial

Collectivism allowed them greater access to free tax

This preview shows page 174 - 176 out of 241 pages.

collectivism and masculinity. Collectivism allowed them greater access to free tax information and financial resources to comply. Their masculinity traits motivated them to expend considerable efforts on record keeping and completing their tax compliance tasks. Their high power distance values ensured they complied in order to get approval and favours from the tax authority. Their masculinity cultural values and long term orientation influenced them to prefer education over welfare tax spending. The European group possessed cultural values of medium term orientation, masculinity and low to medium uncertainty avoidance, which enabled them to file their tax returns and pay their taxes on time. Compared to the Asian group, they incurred higher compliance costs because of their individualistic and low power distance traits, where they relied more on their accountants for tax assistance. Their cultural characteristics of individualism and masculinity influenced them to view taxes as high and they were more dissatisfied with welfare spending. They did not trust the IRD to assist them with their tax compliance obligations due to their low power distance values. The Maori and Pacific groups possessed cultural values of short term orientation, collectivism, low uncertainty avoidance, and femininity, which hindered their ability to file timely tax returns and pay their taxes on time. In particular, their low uncertainty avoidance, collectivism and short term orientation played more significant roles in terms of generating accurate tax information. The obligations to satisfy group commitments, and expending resources to nurture relationships had resulted in tax payment difficulties. Their high power distance values led them to revere their tax practitioners and the IRD, thereby incurring higher tax compliance costs. Their lack of
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161 financial literacy and low tax knowledge also caused many to view tax compliance as stressful and involving tax penalties. Hence, in summary, the Asian group in this sample had the least difficulty with tax compliance, whereas the Maori and Pacific groups had the most difficulties, attributable to their cultural values. The Europeans were similar in their tax compliance behaviours to the Asians, though they experienced some problems with their tax payments and incurred higher compliance costs. The interplay of the various cultural values did impact on the way each ethnic group approached their tax compliance obligations. For some, the tax compliance requirements presented few challenges, whereas for others tax compliance issues resulted in stress and high costs. 9.4 Contribution to qualitative tax research on SMEs As mentioned in Chapter 5, prior tax compliance research on SMEs has been both qualitative and quantitative in nature. Research on ethnic and cultural groups using qualitative research has been undertaken in Australia (Coleman & Freeman, 1994; Rothengatter, 2005a) and Malaysia (Kasipillai & Abdul-Jabbar, 2006). Coleman and Freeman (1994) and Kasipillai and Abdul-Jabbar (2006) adopted the interview method,
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  • Fall '16
  • tax compliance, SME Operators

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