PAYE deductions to reduce the temptation to use the tax monies to satisfy group

Paye deductions to reduce the temptation to use the

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PAYE deductions, to reduce the temptation to use the tax monies to satisfy group obligations. The IRD should reward them with monetary incentives and recognition for their efforts. Given their high power distance values, these forms of reward and recognition would compel them to view IRD more favourably. There are incentives for the IRD to adopt this approach as discussed in Chapter 2, section 2.7. The IRD must be seen to assist them with compliance and not just be an enforcer of tax laws. Another measure to which government agencies including the IRD could undertake is to herald and provide exemplars of those Maori and Pacific operators who have successfully complied and explain how they overcame tax compliance challenges and difficulties. Due to their collective cultures, information on their success stories ought to be publicised. These measures also provide a platform for networking with other SME operators with similar experiences and concerns. Demystifying tax compliance helps to integrate the tax compliance activity as a core part of their business. 9.5.3 Monitoring and assisting European business taxpayers with tax compliance Europeans in this study were found to: be individualistic; have medium to low uncertainty avoidance; have low power distance; have masculinity traits; and be medium term oriented. They: had good record keeping systems; had some, but not too many tax payment difficulties; were reliant on their tax practitioners for tax assistance; and were unwilling to seek IRD assistance. As the European, Maori and Pacific operators in this research showed greater reliance on their tax practitioners, it is important for the IRD to work alongside tax practitioners to ensure that their clients’ accounting systems are in place for tax compliance purposes. Tax practitioners can exert significant influence on compliance levels, as discussed in Chapter 2, sections 2.8 and 2.8.1, and, therefore, the IRD should work cooperatively with tax practitioners to address noncompliance issues.
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166 To improve and equip European operators’ record keeping skills, training seminars could be provided by the Chamber of Commerce, NZTE and Business New Zealand. To gain their trust, there is a need for the IRD to provide tax minimisation seminars and to provide efficient, accurate and consistent advice to reduce compliance costs for SMEs. Any legitimate business deductions ought to be made known to SMEs. 9.5.4 Practice changes required of the IRD Section 9.5.1 to 9.5.3 discussed the different regulatory requirements for the different ethnic groups. The discussion so far shows that the New Zealand government and the IRD should use a variety of strategies to promote greater tax compliance by ethnic SME operators. Recognising the importance of cultural values and how they affect SME operators’ compliance behaviours, they need to adopt measures beyond economic deterrence and audit strategies to improve tax compliance. This is because “methods
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  • Fall '16
  • tax compliance, SME Operators

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