281 Preference for tax practitioners over other sources of tax help SMEs used a

281 preference for tax practitioners over other

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that answers to research question 3 for this thesis will be provided. 2.8.1 Preference for tax practitioners over other sources of tax help SMEs used a variety of paid and free sources of help to fulfil their tax obligations. New Zealand SMEs consider their accountants-tax practitioners to be the most frequently used, the most helpful and the most significant source of help compared to other sources of help obtained privately, from family or peers, books and government (Business NZ- KPMG, 2008; Lewis, Ashby, Coetzer, Harris, & Massey, 2005). Government agencies, including the IRD, are ranked very low in terms of access, usefulness, and significance “even though their services are free” (Lewis et al., 2005, p. 12), as many SME operators are unaware of their services and some do not trust government departments. Though it may be true that tax practitioners are cited as the most frequently used and the most significant source of help for SMEs, this implicitly assumes that SME operators can afford and are willing to pay for their services. This assumption may be less applicable to some ethnic groups, particularly those who are overly obsessed with frugality and business spending. In addition, some ethnic groups have business networks where information exchanges take place (Basu, 2006; Rothengatter, 2005a) that reduce their reliance on tax practitioners. Given that, it would be worthwhile identifying the source of tax assistance used by SME operators as it affects their compliance costs (Sandford, 1995).
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32 2.9 Summary This chapter details prior research on culture and tax compliance of general taxpayers, students and SME operators. Relative to other compliance variables, issues relating to both culture/ethnicity and business taxpayers have received little attention. Most studies of culture and tax compliance were conducted on cross-country student and taxpayer samples and a lesser extent on SMEs. Though research on students has generated useful tax findings, there are some reservations regarding the applicability of student findings to the taxpayer population. This is because students differ from taxpayers in their age, working, and tax filing experiences and they do not face adverse repercussions from noncompliance decisions made in experimental and survey research. The use of cross-country tax findings can be misleading for comparative purposes as researchers have overlooked the unique history, tax system, and tax administration of the various countries. In addition, Gerxhani and Schram (2006) have found “significant differences exist across groups within a country and that these are sometimes larger in magnitude than the differences between countries” (p. 417). Given that, an intra-cultural study may be able to reveal the tax compliance differences between the ethnic groups within the same tax jurisdiction. As this thesis focuses on SME taxpayers, the existing literature pertaining to their tax compliance has been discussed. As tax compliance is a socio-technical activity, the issues of ethnicity, record keeping, sources of tax help, perceptions of cash jobs, tax
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  • Fall '16
  • tax compliance, SME Operators

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