Small business and tax compliance costs: a cross-country study of managerial benefits and tax concessions
Evans, C and Hansford, A and Hasseldine, J and Lignier, PAL and Smulders, S and Vaillancourt, F, Small business and tax compliance costs: a cross-country study of managerial benefits and tax concessions, eJournal of Tax Research, 12, (2) pp. 1-30. ISSN 1448-2398 (2014) [Refereed Article]
Copyright 2014 University of New South Wales. School of Taxation & Business Law
Concern about the size and the regressive nature of taxation compliance costs for small businesses has prompted many governments to introduce special tax concessions and regimes for that sector of the economy. This article reports on exploratory research conducted in four countries (Australia, Canada, South Africa and the United Kingdom) in 2010-11 utilising broadly similar survey instruments, designed to collect and collate data about the levels of compliance costs experienced by small businesses; to identify the extent (if any) to which compliance with tax obligations may have given rise to managerial benefits; and to evaluate the use and usefulness for the small business sector of special tax regimes designed to mitigate the burden of tax compliance. In spite of some data limitations it finds remarkably similar outcomes in all four countries: tax compliance costs remain high and regressive, and do not appear to be diminishing over time; many small businesses are aware of the managerial benefits, in terms of better decision making and management of financial information that derives from tax compliance, though few are able to place a value on those benefits; and legislated small business tax concessions do not appear to be making any difference to the burden of tax compliance in the three countries that were considered in relation to that issue.