What’s in it for me? The potential for managerial benefits to improve tax compliance

Faridy, Nahida and Freudenberg, Brett and Sarker, Tapan ORCID: https://orcid.org/0000-0002-0682-2940 (2018) What’s in it for me? The potential for managerial benefits to improve tax compliance. Australian Tax Forum, 33 (2). pp. 307-342. ISSN 0812-695X


A value-added tax (VAT) may induce businesses to make a clear decision as to operating outside the formal economy, with the VAT seen as a real cost. It is suggested that small and medium enterprises (SMEs) are more likely to contribute to the cash economy, so it is important to have a greater understanding of the factors that may make SMEs more tax compliant, especially with VAT. Potential motivators for complying with a VAT are the managerial benefits that arise from keeping tax records. This article reports the findings from a survey of 240 SMEs in a developing country, with the findings suggesting that for non-compliant taxpayers, being aware of the potential managerial benefits from complying with VAT appears to be more persuasive than the imposition of penalties. In this way, compliance may be improved if taxpayers see 'what’s in it for me' in terms of complying with a country’s VAT system.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Files associated with this item cannot be displayed due to copyright restrictions.
Faculty/School / Institute/Centre: No Faculty
Faculty/School / Institute/Centre: No Faculty
Date Deposited: 03 May 2022 01:18
Last Modified: 30 May 2022 03:47
Uncontrolled Keywords: Tax compliance; financial literacy; compliance; managerial benefits; tax; VAT
Fields of Research (2020): 35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3502 Banking, finance and investment > 350205 Household finance and financial literacy
Socio-Economic Objectives (2020): 15 ECONOMIC FRAMEWORK > 1502 Macroeconomics > 150210 Taxation
URI: http://eprints.usq.edu.au/id/eprint/47758

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