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Tax compliance of small and medium enterprises: a developing country perspective

Tax compliance of small and medium enterprises: a developing country perspective <jats:sec> <jats:title content-type="abstract-subheading">Purpose</jats:title> <jats:p>The purpose of this paper is to establish the relationship between tax fairness, isomorphic forces, strategic responses and tax compliance in Ugandan small and medium enterprises (SMEs).</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title> <jats:p>This is a correlational and cross-sectional study using two respondent types, the demand (represented by the tax collecting body respondents) and supply (represented by SME respondents) sides of tax compliance, to examine perceived tax compliance in Uganda’s SMEs.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Findings</jats:title> <jats:p>Tax fairness, isomorphic forces and strategic responses have a predictive force on tax compliance. Significant mediation effects of tax fairness and also strategic responses are found. The two respondent types perceive the study variables differently – providing an understanding of why the tax compliance puzzle has remained a burgeoning concern. For example, the tax-collecting body respondents perceived more tax fairness than SME respondents, suggesting that perceived tax fairness depends on whose “lenses” you look through.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Research limitations/implications</jats:title> <jats:p>Rather than focussing only on the importance of the rational analytical deliberation of tax fairness by taxpayers in influencing their tax compliance, the current paper shows that in addition, isomorphic forces and strategic responses establish the basis for understanding taxpayers’ compliance.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Originality/value</jats:title> <jats:p>The methodology that enlists two respondent types, i.e. the supply side of tax compliance and the demand side of tax compliance, probably offers a unique way of deriving better results than previous studies.</jats:p> </jats:sec> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Regulation and Compliance CrossRef

Tax compliance of small and medium enterprises: a developing country perspective

Journal of Financial Regulation and Compliance , Volume 25 (2): 149-175 – May 8, 2017

Tax compliance of small and medium enterprises: a developing country perspective


Abstract

<jats:sec>
<jats:title content-type="abstract-subheading">Purpose</jats:title>
<jats:p>The purpose of this paper is to establish the relationship between tax fairness, isomorphic forces, strategic responses and tax compliance in Ugandan small and medium enterprises (SMEs).</jats:p>
</jats:sec>
<jats:sec>
<jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title>
<jats:p>This is a correlational and cross-sectional study using two respondent types, the demand (represented by the tax collecting body respondents) and supply (represented by SME respondents) sides of tax compliance, to examine perceived tax compliance in Uganda’s SMEs.</jats:p>
</jats:sec>
<jats:sec>
<jats:title content-type="abstract-subheading">Findings</jats:title>
<jats:p>Tax fairness, isomorphic forces and strategic responses have a predictive force on tax compliance. Significant mediation effects of tax fairness and also strategic responses are found. The two respondent types perceive the study variables differently – providing an understanding of why the tax compliance puzzle has remained a burgeoning concern. For example, the tax-collecting body respondents perceived more tax fairness than SME respondents, suggesting that perceived tax fairness depends on whose “lenses” you look through.</jats:p>
</jats:sec>
<jats:sec>
<jats:title content-type="abstract-subheading">Research limitations/implications</jats:title>
<jats:p>Rather than focussing only on the importance of the rational analytical deliberation of tax fairness by taxpayers in influencing their tax compliance, the current paper shows that in addition, isomorphic forces and strategic responses establish the basis for understanding taxpayers’ compliance.</jats:p>
</jats:sec>
<jats:sec>
<jats:title content-type="abstract-subheading">Originality/value</jats:title>
<jats:p>The methodology that enlists two respondent types, i.e. the supply side of tax compliance and the demand side of tax compliance, probably offers a unique way of deriving better results than previous studies.</jats:p>
</jats:sec>

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Publisher
CrossRef
ISSN
1358-1988
DOI
10.1108/jfrc-08-2016-0065
Publisher site
See Article on Publisher Site

Abstract

<jats:sec> <jats:title content-type="abstract-subheading">Purpose</jats:title> <jats:p>The purpose of this paper is to establish the relationship between tax fairness, isomorphic forces, strategic responses and tax compliance in Ugandan small and medium enterprises (SMEs).</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title> <jats:p>This is a correlational and cross-sectional study using two respondent types, the demand (represented by the tax collecting body respondents) and supply (represented by SME respondents) sides of tax compliance, to examine perceived tax compliance in Uganda’s SMEs.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Findings</jats:title> <jats:p>Tax fairness, isomorphic forces and strategic responses have a predictive force on tax compliance. Significant mediation effects of tax fairness and also strategic responses are found. The two respondent types perceive the study variables differently – providing an understanding of why the tax compliance puzzle has remained a burgeoning concern. For example, the tax-collecting body respondents perceived more tax fairness than SME respondents, suggesting that perceived tax fairness depends on whose “lenses” you look through.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Research limitations/implications</jats:title> <jats:p>Rather than focussing only on the importance of the rational analytical deliberation of tax fairness by taxpayers in influencing their tax compliance, the current paper shows that in addition, isomorphic forces and strategic responses establish the basis for understanding taxpayers’ compliance.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Originality/value</jats:title> <jats:p>The methodology that enlists two respondent types, i.e. the supply side of tax compliance and the demand side of tax compliance, probably offers a unique way of deriving better results than previous studies.</jats:p> </jats:sec>

Journal

Journal of Financial Regulation and ComplianceCrossRef

Published: May 8, 2017

References