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1 – 10 of 619Richmond Kumi, Richard Kwasi Bannor, Helena Oppong-Kyeremeh and Jennifer Ellah Adaletey
This paper examined tax compliance and its impact on agrochemical traders in Ghana.
Abstract
Purpose
This paper examined tax compliance and its impact on agrochemical traders in Ghana.
Design/methodology/approach
Based on the registered agrochemical lists obtained from the Plant Protection and Regulatory Service Department, 92 agrochemical traders were sampled for data collection. Probit regression was used to estimate determinants of tax compliance, whereas the Inverse Probability Weighted Regression Adjustment Model was employed to evaluate the impact of tax compliance on business performance.
Findings
The results revealed that age and gender relate positively to enforced tax compliance, while education positively impacts voluntary tax compliance. Nonetheless, tax rate, trust and monthly sales positively affect voluntary tax compliance but negatively impact enforced tax compliance. Inversely, while authorities’ power negatively impacted voluntary compliance, it positively influenced enforced tax compliance confirming the Slippery Slope Framework.
Originality/value
To the best knowledge of the authors, this paper is the first to investigate tax compliance determinants and impact among agrochemical traders, despite the tremendous growth of the agrochemical sub-sector in Africa and Ghana. Therefore, this study makes a modest contribution to empirical studies that validate the Slippery Slope Framework in promoting tax compliance in the agricultural and agribusiness sectors of a developing country. Similarly, it also unearths the impact of tax compliance on agribusiness growth which has yet to be highlighted in the extant literature.
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Sadress Night and Juma Bananuka
The purpose of this paper is to examine the mediating effect of adoption of electronic tax system in the relationship between attitude towards electronic tax system and tax…
Abstract
Purpose
The purpose of this paper is to examine the mediating effect of adoption of electronic tax system in the relationship between attitude towards electronic tax system and tax compliance using evidence from small business enterprises (SBEs) of an African developing economy.
Design/methodology/approach
This study used a quantitative research approach where questionnaires with close-ended questions were used. This study’s research design was cross-sectional and correlational. Usable questionnaires were received from 214 managers of SBEs, and data were analysed with the help of SPSS v22 and MedGraph program (Excel version).
Findings
Adoption of electronic tax system is a partial mediator in the association between attitude towards electronic tax system and tax compliance. Results further indicate that adoption of electronic tax system and attitude towards electronic tax system are significantly associated with tax compliance.
Research limitations/implications
This study was cross-sectional, and monitoring changes in behaviour over time was not possible. The study used a quantitative research approach, and this limits respondents from expressing their feelings fully. The study was conducted in Uganda, and it is possible that the results of this study can be generalized to developing countries with environments similar to that of Uganda.
Originality/value
Whereas there has been a number of studies on tax compliance, this study provides an initial empirical evidence on the mediation effect of adoption of electronic tax system in the relationship between attitude towards electronic tax system and tax compliance using evidence from SBEs of an African developing economy – Uganda.
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Jennifer Anna Stark and Erich Kirchler
The purpose of this paper is to investigate the relationship of inheritance tax behavior with normative value principles and factors found relevant for income tax compliance…
Abstract
Purpose
The purpose of this paper is to investigate the relationship of inheritance tax behavior with normative value principles and factors found relevant for income tax compliance. Also, it examines the influence of affectedness and earmarking on inheritance tax compliance. Furthermore, it compares two countries similar in tax morale, tax culture as well as dominant normative value principles, Austria and Germany, of which one – Germany – levies inheritance taxes and the other – Austria – is debating its reintroduction.
Design/methodology/approach
A two (affected vs nonaffected) by two (Austria vs Germany) by two (inheritance tax vs stock profit tax) by three (no earmarking vs social justice earmarking vs equality of opportunity earmarking) experimental online questionnaire was conducted with 296 Austrians and 230 Germans.
Findings
Normative value principles and other socio-psychological variables play an important role concerning inheritance tax behavior. Affectedness does not influence inheritance tax compliance. Earmarking inheritance tax to projects corresponding to these value principles increases inheritance tax compliance in the Austrian sample and could represent a measure to increase inheritance tax compliance in countries implementing inheritance tax or increasing inheritance tax.
Originality/value
This study draws a comprehensive picture of the socio-psychological variables relevant to inheritance tax behavior and tests the effect of earmarking as a policy measure to increase inheritance tax compliance.
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Anna Herculina Anculien Schoeman, Christopher C. Evans and Hanneke Du Preez
Correct registration for the value-added tax (VAT) is a key aspect of tax compliance; it is vital in ensuring adequate tax revenue collection in all countries but particularly in…
Abstract
Purpose
Correct registration for the value-added tax (VAT) is a key aspect of tax compliance; it is vital in ensuring adequate tax revenue collection in all countries but particularly in developing countries such as South Africa. Non-registration hinders sufficient tax revenue collection, stifles economic growth and causes unfair competition with formal businesses. The purpose of this study is to determine whether changes in the VAT rate affect the registration decisions of businesses, ultimately impacting upon tax compliance behaviour and tax revenue collection.
Design/methodology/approach
An online 2 × 2 between-subjects field experiment was conducted, as part of a broader study, to consider compliance with registration requirements by small business entities in South Africa, specifically when there are changes in the VAT rate.
Findings
Although the study establishes that changes in the VAT rate tend not to have a significant impact on the registration decisions of such taxpayers, it nonetheless indicates that the magnitude of the change in the VAT rate may be influential on registration decisions, whether relating to compulsory or voluntary registration. More particularly, the greater the magnitude of the VAT rate decrease (increase), the more likely it is that taxpayers will register (deregister) for VAT purposes, indicating that the magnitude of changes in the VAT rate do have an impact on VAT registration decisions and therefore on tax compliance more generally.
Research limitations/implications
Not only does the study add to the limited knowledge available on registration decisions of small businesses, but also gives valuable guidance to policymakers in terms of determining the VAT rate for the country.
Originality/value
Not only does the study add to the limited knowledge available on registration decisions of small businesses, but it also gives valuable guidance to policymakers in terms of determining the VAT rate for the country.
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The purpose of the paper is to examine current companies’ compliance with value-added tax (VAT) and the evolving role of the compliance officer in the listed companies at Muscat…
Abstract
Purpose
The purpose of the paper is to examine current companies’ compliance with value-added tax (VAT) and the evolving role of the compliance officer in the listed companies at Muscat Stock Exchange (MSX), Oman.
Design/methodology/approach
The study has collected various compliance measures set by Capital Market Authority (CMA) from 2011 to 2019. On top of the websites of CMA, MSX, Oman Tax Authority and other related websites, the paper has considered real data of specific compliance or disclosure measures set by CMA on all companies listed under MSX. The focused period from 2011 to 2019 is where CMA has provided disclosure data as part of mandatory disclosure requirements.
Findings
This paper identified that there is a lack of timely compliance by companies under the existing law, and these companies may face pressures for compliance with VAT enforcement in Oman. Therefore, to comply with the disclosure requirements of listed companies, there is a growing need to appoint a full-time compliance officer and do a compliance audit.
Practical limitations/implications
The results of the study indicate the value of full-time compliance officers and compliance audits. The findings are able to aid in the appraisal of VAT accounting, compliance audit research, and in the selection of proper assessment methods and criteria.
Originality/value
This paper reviews the literature and provides new empirical analysis that are possibly beneficial for both scholars and accounting practitioners.
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The purpose of this paper is to conduct a systematic review of the factors that shape tax morale. A large range of random explanatory variables identified in the literature as…
Abstract
Purpose
The purpose of this paper is to conduct a systematic review of the factors that shape tax morale. A large range of random explanatory variables identified in the literature as determinants of tax morale are synthesised and structured by drawing inspiration from the institutional theory.
Design/methodology/approach
To do this, a systematic search has been conducted using a library catalogue which provides access to more than 400 databases.
Findings
The finding is that the institutional theory provides a suitable theoretical basis to explore tax morale. Indeed, all the factors until now identified as determinants of tax morale (except the control variables/socio-demographic characteristics) can be categorised either as belonging to formal institutions or to informal institutions. The most salient factor is trust, with both vertical and horizontal trust positively related to tax morale.
Research limitations/implications
The outcome is a call for a more nuanced understanding of not only the effect of formal and informal institutions on tax morale but also how formal and informal institutions interact and alter each other and, consequently, affect tax morale.
Practical implications
The paper seeks to encourage governments to start recognising that as low tax morale arises when a gap exists between formal and informal institutions, they need to design policy measures aimed to reduce this gap, rather than persisting with deterrence measures.
Originality/value
This is the first systematic review of the factors that influence tax morale using an institutionalist lens.
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Abdulsalam Ahmed Sawmar and Mustafa Omar Mohammed
This paper aims to construct a conceptual framework which explains the relationship between governance of zakat institutions and zakat payment compliance by using the…
Abstract
Purpose
This paper aims to construct a conceptual framework which explains the relationship between governance of zakat institutions and zakat payment compliance by using the organisational legitimacy theory.
Design/methodology/approach
This paper adopts content analysis and a review of multidisciplinary literature that primarily relate to zakat institutions, public governance and compliance behaviour.
Findings
The paper has developed a model, adapted from Abioye et al. (2013), concerning the influence of governance mechanisms on zakat payers’ compliance using trust as a moderator. The model comprises four governance mechanisms which influence zakat payment compliance. The four mechanisms include the board and leadership attributes, transparency and disclosure practices, stakeholder management practices and procedural justice. Trust has a moderating effect on the relationship between governance and zakat compliance.
Research limitations/implications
This model is applicable to regulated zakat systems, where the state has established zakat institutions and regulations for the collection and distribution of zakat, such as Saudi Arabia, Pakistan, Sudan and Malaysia.
Originality/value
This paper proposes a model, based on Abioye et al. (2013), to explain the influence of governance on zakat payment compliance. The novelty of the study is the addition of one new critical variable, procedural justice, to the Abioye et al.’s (2013) framework. Secondly, the model is proposed for regulated zakat jurisdictions.
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Zaleha Othman, Mohd Fareez Fahmy Nordin and Muhammad Sadiq
This study provides in-depth explanation of Goods and Services Tax (GST) fraud prevention towards sustainability business.
Abstract
Purpose
This study provides in-depth explanation of Goods and Services Tax (GST) fraud prevention towards sustainability business.
Design/methodology/approach
This study applies a qualitative research method, i.e. case study, to address the specific research objective.
Findings
The finding revealed a GST prevention model towards sustainable business. The finding shows that it is pertinent for the government to set preventive strategies in order to retain sustainable income for the government. Two essential dimensions emerged in the findings to support preventive strategies, namely macro- and micro-level measures.
Practical implications
The findings of this study provide managers, investors and policymakers with evidence to what extent GST fraud could be minimize in order to safeguard government source of revenue and retain sustainable business in a country. As GST is an important source of revenue for the government, it is thus crucial to prevent fraud from occurring.
Originality/value
Past studies have primarily focused on GST implementation from the perspective of service tax effectiveness and efficiency. However, this study examined the impact of GST fraud to determine measures that could ensure service tax sustainability using preventive strategies, in turn, introducing to the existing literature on indirect tax.
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This paper attempts to develop a simple, static model of tax administration that is capable of explaining the widespread collusive petty tax administration corruption observed in…
Abstract
Purpose
This paper attempts to develop a simple, static model of tax administration that is capable of explaining the widespread collusive petty tax administration corruption observed in developing countries.
Design/methodology/approach
This paper utilizes a positivist research framework and adopts a theoretical method of analysis, although secondary data will also be mentioned to support theoretical arguments whenever it is appropriate to do so.
Findings
A high rate of collusive tax corruption is inevitable in developing countries.
Research limitations/implications
The model is static and needs to be extended into a dynamic model.
Practical implications
Traditional enforcement tools such as higher audits or a higher penalty regime against tax evasion do not work. Tax simplification can lessen the incidence of tax corruption.
Social implications
Fighting tax corruption requires significant changes in the attitudes of taxpayers and tax auditors.
Originality/value
This paper combines the literature on Kantian economics and tax compliance in an innovative fashion.
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Richmond Kumi and Richard Kwasi Bannor
The paper aims to examine agrochemical traders’ tax morale in three Ghanaian regions.
Abstract
Purpose
The paper aims to examine agrochemical traders’ tax morale in three Ghanaian regions.
Design/methodology/approach
Primary data were collected from 92 respondents using structured questionnaires. A multistage sampling technique was employed and used in selecting respondents.. Descriptive statistics, factor analysis and quantile regression analysis were used to analyse data obtained via the questionnaires.
Findings
The study found tax reporting knowledge, tax calculating knowledge and tax payment knowledge to be the keen factors influencing agrochemical traders’ tax knowledge. It was also revealed that age, religion and marriage positively influence the tax morale of traders. Inversely, gender, high level of education and monthly sales were found to affect tax morale negatively. Moreover, trust (respect, trustworthiness and expertise knowledge) negatively influenced tax morale. Authorities’ tax knowledge and power (sanction and lockdown) were revealed to impact tax morale positively. However, tax morale decreases amongst agrochemical traders with higher tax morale when sanction increases.
Originality/value
Unlike previous studies which focussed on tax morale amongst individuals and firms outside the agribusiness sector, this study examined the tax morale within the informal agrochemical trading sector, which has recently attracted colossal patronage due to the high usage of agrochemicals amongst farmers in Africa and Ghana. This study also assumed tax morale to be at different levels; hence the factors that affect the morale at different levels differ. Therefore, the study examined the factors influencing tax morale amongst agrochemical traders by segregating tax morale into quartiles. Relating to theory, the economic deterrence theory was used to ground the study, which is not usually used in most tax morale studies.
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