The Costs and Benefits of Complying with the Tax System and their Impact on the Financial Management of the Small Firm
Lignier, Philip (2006) The Costs and Benefits of Complying with the Tax System and their Impact on the Financial Management of the Small Firm. Journal of The Australasian Tax Teachers Association, 2(1), pp. 121-143.
Empirical research carried out in different countries provides strong evidence that tax compliance costs impact more heavily on small firms. In addition, results showed that the regressivity of tax compliance costs according to size was even more accentuated after taking into consideration the effects of the cash flow and tax deductibility benefits of tax compliance. However, it has been suggested in the literature that business taxpayers could also be deriving managerial benefits as a result of complying with tax. These managerial benefits are expected to come in the form of a better knowledge of financial affairs and the improved decision-making that will be brought about by the more stringent record keeping imposed by tax requirements. The existing evidence indicates that these managerial benefits could be significant, particularly in smaller firms where accounting systems are initially un-developed. The paper argues that in spite of the abundance of descriptive research in the field, the incidence of tax compliance activities on small businesses is still incompletely understood. Very little explanatory research has attempted to study the relationships between potential influencing factors and the magnitude of tax compliance costs. Likewise, the managerial benefits of tax compliance are still largely un-explored. Fresh empirical data and further investigation are necessary in order to identify the conditions in which managerial benefits may be derived and measure their impact on the financial management of the small firm.
Impact and interest:
Citation counts are sourced monthly from and citation databases.
These databases contain citations from different subsets of available publications and different time periods and thus the citation count from each is usually different. Some works are not in either database and no count is displayed. Scopus includes citations from articles published in 1996 onwards, and Web of Science® generally from 1980 onwards.
Citations counts from theindexing service can be viewed at the linked Google Scholar™ search.
Full-text downloads displays the total number of times this work’s files (e.g., a PDF) have been downloaded from QUT ePrints as well as the number of downloads in the previous 365 days. The count includes downloads for all files if a work has more than one.
|Item Type:||Journal Article|
|Keywords:||tax compliance costs, taxation policy, small business taxation|
|Subjects:||Australian and New Zealand Standard Research Classification > LAW AND LEGAL STUDIES (180000) > LAW (180100) > Taxation Law (180125)|
|Divisions:||Current > QUT Faculties and Divisions > QUT Business School|
|Copyright Owner:||Copyright 2006 Philip Lignier|
|Deposited On:||08 Apr 2008|
|Last Modified:||29 Feb 2012 13:56|
Repository Staff Only: item control page