My mum is kicking up a fuss because the accountant is charging a lot of money I

My mum is kicking up a fuss because the accountant is

This preview shows page 127 - 129 out of 241 pages.

had things in place. My mum is kicking up a fuss because the accountant is charging a lot of money. I don’t know, but he does quite a lot for us.” (P1) Some Pacific and Maori operators in this sample perceived their accountants as paternalistic figures to guide them through their tax obligations in return for their unquestioning obedience (Meleisea, 1987). However this expectation was not always met by their accountants who sometimes charged excessively (in the view of ethnic operators) for undertaking simple accounting tasks. The high compliance costs reinforced their perception that fulfilling one’s tax obligations can be overwhelmingly difficult, thus heightening their fear towards any tax compliance requirements. In doing so, it confirmed their beliefs that tax compliance activities were best left to those with tax expertise. Consequently, many were deterred from undertaking the tax compliance functions themselves, such as record keeping and acquiring accounting and tax knowledge: “The PIs (Pacific Islanders) look at authorities with high esteem, and that’s why they struggle with that as they always rely on others to tell them what to do, and how to do it, and they are followers.” (BE10). According to the business experts, Maori and Pacific operators’ trusting attitude and dependence on their accountants resulted in some undesirable outcomes. These included: excessive accounting fees; incorrect advice given on business structures, technical matters and accounting systems; tax penalties resulting from errors made by the accountants; and embezzlement of business operators’ tax monies: “Some accountants have also ripped some taxpayers off. Like we had clients who thought that their accountants had paid the taxes on their behalf but instead they were not paid and the accountants were the ones who stole the money.” (BE3 and BE4) One Maori operator felt that her accountant did not give proper advice to minimise her taxes and another reported being incorrectly advised on the accounting package which was beyond his ability to understand and use. Though they perceived their accountants
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114 were charging excessively, they were reluctant to take any action due to fear of retribution resulting from their high power distance values: “Like some Polynesians we do not question the accountants and go back and ask them. I am always too scared to question my accountant too. It is kind of fear them as they will not look at you favourably and help you more in the future sort of thing. My attitude is that I try to stay away from them as much as I can, and also I don’t want to upset them or question them.” (P3) The findings in this section showed that tax practitioners had taken advantage of some SME operators, especially those with a combination of high power distance values and with low levels of tax knowledge. Hence this adds to the tax literature that ethnic groups with high power distance values and low levels of tax knowledge may be easy targets by unscrupulous tax practitioners, who charge tax fees that are not commensurate with the level and difficulty of tax services rendered.
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  • Fall '16
  • tax compliance, SME Operators

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