Qualitative research enables one to study things in their natural settings

Qualitative research enables one to study things in

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tax compliance practices and perceptions. Qualitative research enables one to “study things in their natural settings, attempting to make sense of, or interpret, phenomena in terms of the meaning people bring to them” (Denzin & Lincoln, 2005, p. 3). To corroborate the accounts of SME operators and to gain different perspectives of the tax compliance phenomenon, tax practitioners and business experts were included in the research. The broad central research question for this thesis was how cultural values can be inferred from the tax compliance behaviours and perceptions of SME operators in New Zealand. Fifty nine ethnic SME operators, tax practitioners and business experts participated in a series of in-depth, semi-structured, face-to-face interviews from 2006 to 2010. Discussions were also carried out with key informants to access Maori, Pacific and Asian participants. The accounts of the participants were recorded and analysed against seven themes which were: perceptions of tax compliance; types of accounting system used; record keeping responsibility; tax assistance used; perceptions of the IRD; perceptions of tax spending; audit experiences; and tax payment experiences. This study found that Hofstede’s (2001) five cultural dimensions could be used to explain the differences in the tax compliance behaviours and perceptions of ethnic SME groups within a country. The chapter begins by examining the significance of the study in section 9.2 followed by the contributions made towards the tax literature on SMEs in section 9.3. Section 9.4 discusses how this study contributes to qualitative tax research and section 9.5 details the policy and practice recommendations. Section 9.6 details the limitations of this
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155 study. Section 9.7 offers some suggestions for future research, with the conclusion in section 9.8. 9.2 Significance of the study Tax researchers have only recently begun to account for ethnicity in tax compliance due to the increasing cultural diversity in most OECD countries. This study is relevant because, as most Western countries have changing demographics due to globalisation, it is increasingly important that both business taxpayers and tax authorities adapt to these changes to ensure successful compliance and that fair amounts of taxes are collected from all groups. Failure among SMEs to comply can lead to high tax compliance costs, disenfranchisement and business failures (Prescott & Hooper, 2009). Researchers as yet do not have critical knowledge of specific problem areas of tax compliance. If the tax authorities have knowledge of the cultural implications of the ethnic groups, they would understand why some ethnic groups are less predisposed to successful tax compliance, instead of making assumptions about the taxpayers. Given that, this study could assist the tax authorities and ethnic operators by giving them insights into the cultural factors influencing tax compliance. These insights could help the tax authorities to contextualise their communication, assistance, monitoring programmes and audit strategies towards ethnic SME groups, to enhance voluntary compliance.
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  • Fall '16
  • tax compliance, SME Operators

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