They had well kept record keeping systems had no tax payment difficulties

They had well kept record keeping systems had no tax

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avoidance, high power distance, masculinity traits and were long term orientated. They: had well kept record keeping systems; had no tax payment difficulties; undertook record keeping functions themselves; were more reliant on peers and in-group networks for tax assistance; were willing to seek IRD assistance, but declined to do so because of the inefficient telephone services; and were more permissive of the cash economy. Strategies for monitoring Asian operators need to ensure that their networks and peers are also complying, by increasing the IRD presence within the Asian community. The
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163 IRD could offer tax compliance seminars and training targeted specifically for Asian businesses, both in English and Asian (such as Mandarin, Tamil and Korean) languages. These services should be undertaken by Asian and European IRD officers for three reasons. First, Asian officers have a better understanding of the cultural underpinnings for Asian tax behaviours. Second, it signals to the Asian community that the IRD is willing to understand and assist them, which is important for relationship building. Third, to maintain their high power distance values, European officers symbolise the authoritativeness of the IRD. Increasing the IRD presence may help change the cash job practices and perceptions of the Asian community. Currently, the IRD does not provide specialised services to any ethnic groups other than for Maori with their Maori Community Officers. For the rest, language interpretation services are provided and assistance from 100 liaison officers nationwide is provided to service all other ethnic groups, business structures and tax entities. The percentage of Asian staff employed by the IRD is currently at 8 percent, and not all of them have direct interactions with taxpayers (Inland Revenue, 2011). As Asians value time and expediency, the IRD could improve on providing prompt, accurate and reliable phone services. This not only provides a mechanism to interact with the Asian operators but it can also lessen their dependency on their networks and peers as sources of tax assistance. By reducing their dependency on these networks, Asian operators may be less influenced by some of their undesirable tax practices, including undeclared cash jobs. More interaction between the IRD and Asian operators implies greater indirect monitoring of this group. “Saving face” is important to the Asians due to their collective and tight-knit business networks. To address the permissive culture of cash jobs, information needs to be provided about the consequences of noncompliance, especially for those who are relatively new to the country. Using the shaming mechanism as a deterrent for evading taxes and heralding those who had complied could possibly help reduce the frequency of cash jobs among Asian businesses. However, the IRD needs to use these measures strategically in order to gain the trust of the community, as using these measures indiscriminately can be counter-productive, given the collective mentality of the Asian community.
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164 9.5.2
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  • Fall '16
  • tax compliance, SME Operators

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