scholarly journals A Critical Review of the Characteristics of Presumptive Tax Systems in Developing Countries

2021 ◽  
Vol 17 (2) ◽  
pp. 27-43
Author(s):  
Munyaradzi Duve ◽  
Daniel P. Schutte
Keyword(s):  
Developing Countries ◽  
Small Businesses ◽  
Tax Compliance ◽  
Empirical Literature ◽  
Formal Sector ◽  
Tax System ◽  
Classification Framework ◽  
Tax Systems ◽  
Compliance Behaviour ◽  
System Characteristics

This paper considers the effect of the presumptive tax system characteristics on the tax compliance behaviour of small businesses in developing countries. Since the concept of presumptive taxation involves several features influencing the formalisation of small businesses, this paper seeks to survey three key areas of literature: targeted taxpayers, thresholds and timeframe. This paper differs fundamentally from previous studies in that it analyses presumptive tax system characteristics. A descriptive review approach was followed in evaluating the empirical literature on presumptive tax system characteristics. A content analysis was then performed on literature about categories and subcategories provided in the classification framework. The review highlights similarities and conflicting evidence of presumptive tax system characteristics in transforming the compliance behaviour of small businesses. It was concluded that the blended use of information technology and existing presumptive tax systems can facilitate the movement of small businesses from the informal to the formal sector.

scholarly journals THE ROLE OF INCOME TAX SYSTEM STRUCTURE IN TAX NON-COMPLIANCE BEHAVIOUR AMONG SMEs IN YEMEN

2021 ◽  
Vol 16 (Number 2) ◽  
pp. 23-49
Author(s):  
Lutfi Hassen Al-Ttaffi ◽  
Hijattulah Abdul-Jabbar ◽  
Saeed Awadh Bin-Nashwan
Keyword(s):  
Income Tax ◽  
Small And Medium Enterprises ◽  
Tax Compliance ◽  
System Structure ◽  
Tax System ◽  
Tax Rate ◽  
Tax Systems ◽  
High Level ◽  
Medium Enterprises ◽  
Compliance Behaviour

Tax is the main source of government revenue. However, a number of countries worldwide are increasingly besieged by challenges regarding compliance levels with the rules of tax systems. Thus, this paper aims to enhance an understanding of tax non-compliance behaviour by investigating the effect of the income tax system structure on Yemeni taxpayers’ behaviour. The study focuses on income tax compliance behaviour of owner-managers of small and medium enterprises (SMEs), as the Yemeni economy relies heavily on this sector. The SME sector represents 99.6 percent of business in Yemen. Based on a quantitative approach using a self-administered survey instrument, a total of 330 valid questionnaires were collected and the feedback provided analyzed. The results demonstrate that SME taxpayers exhibited a high level of tax non-compliance. Furthermore, the multiple regression analysis shows that the tax rate had a positive and significant influence on tax non-compliance behaviour, but the tax penalties rate did not. These results can be especially relevant to policymakers and practitioners of tax systems structures, particularly in a developing country such as Yemen.

scholarly journals Tax Payers’ Attitude and Compliance Behavior among Small Medium Enterprises (SMEs) in Botswana

2012 ◽  
Vol 1 (1) ◽  
pp. 113 ◽  
Author(s):  
Nugi Nkwe
Keyword(s):  
Tax Compliance ◽  
Descriptive Statistics ◽  
Statistical Tools ◽  
Compliance Behavior ◽  
Tax Systems ◽  
Small Medium Enterprises ◽  
Medium Enterprises ◽  
Tax Payers ◽  
Compliance Behaviour

In the framework of this study, an attempt to identify the level of taxpayers’ attitudes and tax compliance behaviour towards tax systems, to identify factors which influence taxpayers’ attitudes, to establish relationship between attitudes and tax compliance behaviour and to recommend ways that may contribute to development of enhanced taxpayers’ attitudes and compliance behaviour among Small Medium Enterprises in Botswana. This research was a survey whose data is collected from two hundred taxpayers in Small Medium Enterprises. After the data was collected, it was analyzed using descriptive statistics then summarized and presented using statistical tools. From the findings, the conclusionis that taxpayer’ attitudes do affect their compliance behaviour and recommendations weremade to try andhelp these SMEs.

scholarly journals BUSINESS CHARACTERISTICS, TAX ADMINISTRATION AND TAX COMPLIANCE BY SMES IN NIGERIA

2018 ◽  
Vol 3 (Special) ◽  
pp. 7-17
Author(s):  
Abidemi C. Adegboye ◽  
Ifeoluwa Alao-Owunna ◽  
Monday I. Egharevba
Keyword(s):  
Ownership Structure ◽  
Small Businesses ◽  
Tax Compliance ◽  
Small Scale ◽  
Tax Administration ◽  
Business Taxes ◽  
Personal Taxes ◽  
Tax Education ◽  
Compliance Behaviour

This study evaluates the relative impacts of tax administration and business characteristics on the tax compliance behaviour of small scale businesses in Nigeria. The role of tax education as an effective tax administration strategy is also considered. Results show that tax education stimulates small businesses tax compliance behaviour, a result that is robust for both business taxes and personal taxes. It is also found that overall tax administration system in Nigeria does not have significant impact on tax compliance among small businesses in Nigeria due to inefficiencies and corruption in the system. Business ownership structure, registration status, and management qualification/experience are all found to promote tax compliance by small businesses in Nigeria.

scholarly journals The Influence of Tax Knowledge on Tax Compliance Behaviour: A Case of Yemeni Individual Taxpayers

2020 ◽  
Vol 10 (Number 2) ◽  
pp. 15-30
Author(s):  
Lutfi Hassen Ali Al-Ttaffi ◽  
Saeed Awadh Bin-Nashwan ◽  
Muneer Rajab Amrah
Keyword(s):  
Developing Countries ◽  
Significant Influence ◽  
Tax Policy ◽  
Tax Compliance ◽  
Policy And Strategy ◽  
Compliance Behaviour

This paper aims to enhance the understanding of tax compliance behaviour of individual Yemeni taxpayers. It investigated the influence of tax knowledge on the behaviour of taxpayers. A survey was used to collect the required data. The major finding of this study is that tax knowledge of citizens has a significant influence on their likely compliance behaviour. Specifically, compliance behaviour increases when tax knowledge is higher. This study is probably among the first to investigate and to provide evidence on the influence of citizens tax knowledge on tax compliance behaviour in Yemen. The outputs of this study could serve as a useful input, not only for tax policy and strategy in Yemen, but also in other developing countries. Thus, governments are recommended to work on increasing tax knowledge of its citizens which will result in improving the level of tax compliance.

scholarly journals Do South African Small Businesses Prefer Conservative Tax Advice To Aggressive Tax Advice?

2012 ◽  
Vol 11 (6) ◽  
pp. 697
Author(s):  
Melissa Lubbe ◽  
Gerhard Nienaber
Keyword(s):  
South Africa ◽  
Small Business ◽  
South African ◽  
Tax Evasion ◽  
Small Businesses ◽  
Tax Compliance ◽  
Rural South ◽  
Tax Practitioners ◽  
Tax Relief ◽  
Compliance Behaviour

Taxpayers relationship with tax practitioners may influence tax compliance behaviour. International research has been inconclusive on whether taxpayers prefer conservative tax approaches or more aggressive approaches. There has been only limited research on taxpayers preferences in South Africa. Several tax relief measures are available to South African small businesses as growing enterprises, but such entities may lack skilled tax staff and they therefore rely on tax practitioners. The first objective of this study is to determine whether such taxpayers prefer conservative or aggressive tax advice from practitioners. The second objective is to determine whether small business taxpayers would continue to use their tax practitioners services if they disagree with a suggested tax approach. Questionnaires were sent to 50 small businesses in a rural South African town. The data showed that most participating small business taxpayers prefer conservative advice but will agree with the tax practitioner, irrespective of the type of tax advice offered. As long as the advice does not involve tax evasion, they prefer to retain a tax practitioners services irrespective of the type of advice and their (dis)agreeing with it.

scholarly journals THE CONTEMPORARY INTERNATIONAL TAX SYSTEM, DEVELOPING COUNTRIES, BEPS AND OTHER CURRENT ISSUES / O SISTEMA TRIBUTÁRIO INTERNACIONAL CONTEMPORÂNEO, PAÍSES EM DESENVOLVIMENTO, BEPS E OUTRAS QUESTÕES ATUAIS

2018 ◽  
Vol 6 (7) ◽  
Author(s):  
Marcos Aurelio Pereira Valadão
Keyword(s):  
Developing Countries ◽  
International Organizations ◽  
The South ◽  
Profit Shifting ◽  
Tax System ◽  
Tax Systems ◽  
International Tax ◽  
Rich Countries

This paper analyzes the Contemporary International Tax System with focus on international tax cooperation, the participants of this context, that goes beyond the countries, and the issues that are present in base erosion and profit shifting (BEPS) Project with the focus on  those that are the most important for developing countries, also taking into consideration the Brazilian approach to those issues. It also verifies the role of international organizations (including NGOs), The paper consider other aspects, for example, the south Centre initiative on tax cooperation, and the biased approach from the northern rich countries towards the south poorer economies, coming to the conclusion that the differences between the needs of of developed and developing countries, which affect their tax systems, and the different tax systems itself, must be taken into account.

scholarly journals Tax Transparency for an Effective Tax System

2021 ◽  
Author(s):  
Kelbesa Megersa
Keyword(s):  
Developing Countries ◽  
Tax Evasion ◽  
Rapid Review ◽  
Public Confidence ◽  
Contributing Factors ◽  
Tax System ◽  
Financial Flows ◽  
Tax Revenues ◽  
Tax Systems ◽  
High Level

This rapid review examines evidence on the transparency in the tax system and its benefits; e.g. rising revenue, strengthen citizen/state relationship, and rule of law. Improvements in tax transparency can help in strengthening public finances in developing countries that are adversely affected by COVID-19. The current context (i.e. a global pandemic, widespread economic slowdown/recessions, and declining tax revenues) engenders the urgency of improving domestic resource mobilisation (DRM) and the fight against illicit financial flows (IFFs). Even before the advent of COVID-19, developing countries’ tax systems were facing several challenges, including weak tax administrations, low taxpayer morale and “hard-to-tax” sectors. The presence of informational asymmetry (i.e. low tax transparency) between taxpayers and tax authorities generates loopholes for abuse of the tax system. It allows the hiding of wealth abroad with a limited risk of being caught. Cases of such behaviour that are exposed without proper penalty may result in a decline in the morale of citizens and a lower level of voluntary compliance with tax legislation. A number of high-profile tax leaks and scandals have undermined public confidence in the fairness of tax systems and generated a strong demand for effective counteraction and tax transparency. One of the key contributing factors to lower tax revenues in developing countries (that is linked to low tax transparency) is a high level of IFFs. These flows, including international tax evasion and the laundering of corruption proceeds, build a major obstacle to successful DRM efforts. Research has also identified an association between organisational transparency (e.g. transparency by businesses and tax authorities) and stakeholder trust (e.g. between citizens and the state). However, the evidence is mixed as to how transparency in particular influences trust and perceptions of trustworthiness.

Criminal Investigations of Taxpayer Fraud

2006 ◽  
Vol 4 (1) ◽  
pp. 44-58 ◽  
Author(s):  
Nancy B. Nichols ◽  
Robert C. Richardson
Keyword(s):  
Small Businesses ◽  
Tax Compliance ◽  
The United States ◽  
Internal Revenue Service ◽  
Criminal Investigation ◽  
Criminal Prosecution ◽  
Tax System ◽  
Voluntary Compliance ◽  
Cash Economy

Under the voluntary tax system in the United States, taxpayers are responsible for fully and accurately reporting and paying the amount of taxes owed. Voluntary tax compliance is reinforced through various programs including the document matching program, Internal Revenue Service (IRS) civil audits, and criminal prosecution. The Criminal Investigation (CI) division of the IRS is responsible for enforcing the criminal statutes. This article investigates the role of CI in tax compliance and analyzes the results of 598 published tax crime cases from 2000 through 2004. The results indicate that CI must increase its focus on cash economy small businesses. Additional recommendations include the expansion of tax withholding to nonemployee compensation and including payments to small businesses in the document matching program to reinforce the voluntary compliance system.

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