other ethnic groups they avoided tax penalties and business failures resulting

Other ethnic groups they avoided tax penalties and

This preview shows page 152 - 154 out of 241 pages.

other ethnic groups, they avoided tax penalties and business failures resulting from delay in tax payments. They were self reliant, disciplined, and cash spending was planned since they did not have access to extended family resources. Their individualistic and medium to low uncertainty avoidance values caused them to seek out banks as additional and alternative sources of funding: “No- we never had problems with the tax payments because I am pretty good in managing my money. Cash flow is not really an issue and I don’t waste money and I don’t spend a lot.” (E1) “I believe that there should be enough cash to run the business. If I really run out of cash, I just ring my bank and I have a really good relationship with my bank. I just ring him up and there is no paperwork involved. I do not arrange for alternative payments with the IRD if we have a shortage of cash to pay the IRD.” (E4) Individualistic Europeans had fewer financial obligations towards their extended families compared to collectivistic Maori and Pacific groups and therefore were more able to pay their taxes on time, according to the business experts: “There are differences in the way the traditional European, Asians, Maori and Pacific Islanders run their businesses. In my view, the Europeans styles are less subjected to influences from family or from respect relationships because they are more individualistic in their outlook. Whereas the Maori are more influenced with the whanau and the family and there is the big thing about koha (giving in kind) and things like that.” (BE6) Cultural values of individualism and medium to low uncertainty avoidance enhanced the European operators’ ability to pay their taxes on time. These cultural values are more compatible with the self assessment tax regime where taxpayers are expected to independently calculate their tax liabilities and pay their taxes when due. The next subsection details their perceptions and participation in the cash economy.
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139 8.4.1 Europeans’ perceptions of and participation in the cash economy Unlike the Asian group, nearly all the European sample did not admit to participating in the cash economy, though they were aware of the practice amongst other SMEs. This confirms the findings that cash job practices are common among SMEs (McIntosh & Veal, 2001; Noble, 2000). The European sample rejected cash jobs, as they were unable to claim tax deductions for goods and services purchased without receipts. In addition, they felt that it was not beneficial for their business in the long run: “But I personally would not do it, as I am against it totally. Someone offered me cash job the other day, and I refuse it.” (E8) “Personally we will not do it, as we need all the deductions that we can claim for GST and deductions for our profits.” (E4) “I don’t know but I have a business partner and I made sure that everything is done through the books. Regardless of whether the amount is $110, we would invoice the client because they have to feel
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  • Fall '16
  • tax compliance, SME Operators

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