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1 – 10 of over 11000Anculien Schoeman, Chris Evans and Hanneke du Preez
Enhanced revenue mobilization is essential in developing countries such as South Africa. However, it is inevitably a complex process, both from economic and political…
Abstract
Enhanced revenue mobilization is essential in developing countries such as South Africa. However, it is inevitably a complex process, both from economic and political perspectives. Increasing the rate of value-added tax (VAT) has been identified as one option to increase tax revenue, although the likely effect of VAT rate changes on tax compliance behaviour is undetermined. This study considers the impact of such a change on the tax compliance behaviour of small business entities. In order to address the impact of VAT rate changes on tax compliance behaviour, a between-subjects pre-test/post-test online field experiment was conducted and designed to identify the implications of rate changes of various directions and magnitude.
Statistical analysis of the data obtained from the experiment indicated that small business entities are inclined to reduce the VAT liability when there is an increase in the VAT rate, and to do so by overstating purchases rather than under-declaring sales. This leads to an increase in non-compliance. The greater the magnitude of the VAT rate increase, the greater the level of non-compliance. In contrast, no significant relationships were identified between a decrease in the VAT rate and tax compliance.
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Kevin Holmes, Lisa Marriott and John Randal
This research aims to measure compliance in a tax experiment among students. The aim of the study is to investigate relationships between claimed behaviour in a questionnaire and…
Abstract
Purpose
This research aims to measure compliance in a tax experiment among students. The aim of the study is to investigate relationships between claimed behaviour in a questionnaire and actual behaviour in an experimental environment, together with different behaviours between males and females, and different age cohorts.
Design/methodology/approach
A total of 630 undergraduate Commerce students at a New Zealand university completed a questionnaire on attitudes towards the tax system. The students subsequently participated in a simulation experiment requiring responses to hypothetical tax evasion decisions. Individual reward payments were contingent on the outcome of these tax evasion decisions. Questionnaire responses, which captured intended behaviour, were compared with actual behaviour in the experiment.
Findings
The study finds more compliant behaviour among older students and students who have been at university longer. It also finds female students demonstrate more ethical responses in their behaviour than male students. In contrast to extant literature, it finds a positive relationship between students indicating a preference for compliant behaviour in the questionnaire, and behaviour in the experiment. This leads support for the use of Defining Issues Tests (or similar instruments that capture moral development intentions) in ethics education research, and challenges recent studies that find a gap between intended and actual behaviour.
Research limitations/implications
As with all experimental research, the design is necessarily an artificial representation of the real world. Thus, the ability to generalise from this research is restricted.
Originality/value
Much of the research into the influence of ethics education on accounting students focuses on student claims of how they would respond in a hypothetical situation as measured by a Defining Issues Test or similar instrument, in order to provide a measure of ethical development. In contrast, this study adopts a behavioural approach. The findings indicate that Defining Issues Tests are likely to be an appropriate tool for ethics education research.
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M. Elizabeth Howard, Robert A. Seay and Ryan A. Seay
Online retailers often lack nexus within a purchaser’s home state and do not collect sales tax at the point of sale. Consumers exacerbate the loss of tax revenue by typically not…
Abstract
Purpose
Online retailers often lack nexus within a purchaser’s home state and do not collect sales tax at the point of sale. Consumers exacerbate the loss of tax revenue by typically not remitting the use tax on these purchases. To date, very little research addresses the effectiveness of methods to increase use tax compliance, and the need for more work is well documented in the literature.
Design
This study examines, in a controlled economics-based experiment, the effectiveness of current approaches to close the use tax gap. Participants are randomly assigned to one of three treatments to determine the extent to which they would voluntarily pay use tax on a purchase transaction. The experiment mimics the natural environment and measures the participants’ actual compliance with cash payouts.
Findings
We find individuals are significantly more likely to pay the use tax when given detailed information about their online purchases and the use tax obligation compared to only receiving a description of the use tax. We also find compliance is significantly higher when individuals have a separate state income tax line on which to report use tax liability.
Value
Unlike personal income tax compliance, consumers are more likely to evade use tax payments because taxing authorities are usually unable or unwilling to audit consumer purchases. This makes an examination of the effectiveness of reporting and collection methods worthwhile. This study measures use tax compliance based on actual consumer behavior with real economic consequences rather than taxpayer intentions, as reported in prior work. This is important because intentions and behavior are often different, especially in an economic setting. Finally, policymakers will benefit from an effectiveness-assessment of actual methods, rather than hypothetical and potentially unfeasible approaches, to try and increase use tax compliance.
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Matúš Sloboda, Patrik Pavlovský and Emília Sičáková-Beblavá
The objective was to increase earnings of the city of Prievidza from waste disposal fee by proactive communication – reminder (a letter) and leaflets with targeted framing. The…
Abstract
Purpose
The objective was to increase earnings of the city of Prievidza from waste disposal fee by proactive communication – reminder (a letter) and leaflets with targeted framing. The quasi-experiment aims to find out which type of leaflet framing (an injunctive social norm or public good) causes the most effective change in the debtors' behaviour.
Design/methodology/approach
The article presents the results of a behavioural quasi-experiment, carried out on a local government level. The effectiveness of the intervention was tested in a quasi-experiment with the sample size 712, which is 35% of all waste disposal fee debtors in Prievidza.
Findings
The intervention that has proven to be the most effective was a reminder together with an injunctive social norm leaflet. It resulted in a 1.7 times higher probability for the debt to be paid. The results also indicate that a reminder is significantly more effective if targeted at debtors who only owe one payment–this group was three times more likely to pay their debt after being exposed to the intervention.
Practical implications
Public policy recommendation is to primarily target the group of debtors who owe one payment.
Originality/value
Another testing and replication of this experiment design is highly important. Nonetheless, the first testing (field quasi-experiment) shows the potential of using the notification as well as social norm framing. It also appears that self-governments should use notifications to primarily address debtors without a long history of non-payment.
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Daniele Checchi and Antonio Filippin
The “prospect of upward mobility” (POUM) hypothesis formalised by Benabou and Ok (2001a) finds explicit assumptions under which some individuals that are poorer than the average…
Abstract
The “prospect of upward mobility” (POUM) hypothesis formalised by Benabou and Ok (2001a) finds explicit assumptions under which some individuals that are poorer than the average optimally choose to oppose redistribution policies. The underlying intuition is that these individuals rationally expect to be richer than average in the future. This result holds provided the mobility process is concave in expectations, redistribution policies are expected to last for a sufficiently long period and individuals are not too risk averse. This paper tests the POUM hypothesis by means of a within subjects experiment where the concavity of the mobility process, the degree of social mobility, the knowledge of personal income and the degree of inequality are used as treatments. Other determinants of the demand for redistribution, such as risk aversion and inequality aversion are (partially) controlled for via either the experiment design or the information collected during the experiment. We find that the POUM hypothesis holds under alternative specifications, even when we control for individual fixed effects.
Michaele L. Morrow, Jacob Suher and Ashley West
This research investigates the effect of imposing a tax on sugar-sweetened beverages (SSBs) on the likelihood of purchasing SSBs. We design and test an experimental framework that…
Abstract
This research investigates the effect of imposing a tax on sugar-sweetened beverages (SSBs) on the likelihood of purchasing SSBs. We design and test an experimental framework that examines this and the effects of providing an explanation about the presence of an SSB tax and information about the negative health effects of consuming SSBs. Consistent with Elbel, Taksler, Mijanovich, Abrams, and Dixon (2013) and Taylor, Kaplan, Villas-Boas, and Jung (2019), we find that imposing a tax, in addition to increasing the conspicuousness of the tax by explaining the presence of a tax (and in some cases, the negative health effects) reduces the likelihood of purchasing an SSB anywhere from 8.39% to 18.15%. We contribute to the public health and tax policy literature by testing consumer choice in a controlled experimental setting and considering the effect of individual differences on the choice to purchase SSBs. Imposing a tax on SSBs may be an effective tool for decreasing SSB consumption that is made more effective when the tax is conspicuous.
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The effect of affect in accounting contexts has recently attracted interest, but numerous questions still remain. Given that affect can significantly impact a variety of…
Abstract
Purpose
The effect of affect in accounting contexts has recently attracted interest, but numerous questions still remain. Given that affect can significantly impact a variety of accounting judgments and decisions in theoretically different manners, the purpose of this synthesis is to understand the state of extant accounting literature in affect and identify directions for future research.
Design/methodology/approach
This synthesis systematically reviews experimental accounting papers related to affect in both theoretical and functional respects. The authors first elaborate on the affect infusion theory as the theoretical foundation for the synthesis. The authors then present the sampling method. In Section 4, the authors conceptually and factually summarize affect accounting papers in terms of four major functional areas: auditing, managerial/corporate accounting, tax and financial accounting. The implications of moderators examined in some papers are also discussed. Finally, the authors conclude by revisiting the importance of affect in accounting contexts.
Findings
Throughout the synthesis, the authors provide future research opportunities with respect to theories, each functional area and other gaps in the accounting literature.
Originality/value
This synthesis contributes to the accounting literature by providing a pathway to understand the development of accounting research on affect, integrating theoretical foundations and offering future research opportunities to advance the literature.
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Yuen Hoong Voon, Anna Che Azmi and Sharmila Jayasingam
This study aims to examine the consequences of tax authorities’ use of concession-timing negotiation strategies on tax practitioners and their final proposed offers.
Abstract
Purpose
This study aims to examine the consequences of tax authorities’ use of concession-timing negotiation strategies on tax practitioners and their final proposed offers.
Design/methodology/approach
This is an experimental study conducted on tax practitioners using a design of 2 × 1, varying the tax authorities’ negotiation strategy (i.e. concession-gradual and concession-end strategies) across two levels.
Findings
The concessionary negotiation strategies adopted by tax authorities influence tax practitioners’ final proposed offers, their perceptions of fairness (i.e. distributive justice and procedural justice) and their aggressiveness of stance in tax audit negotiations.
Originality/value
This experimental study contributes to existing research on tax authority-tax practitioner negotiation models used during tax audits by providing the first evidence that concession timing matters. The study extends the negotiation model to include tax aggressiveness as a new variable and examines the indirect roles of fairness and offers in tax audit negotiations.
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Cedwyn Fernandes and Ajit Karnik
The main purpose of this paper is to understand the impact on the United Arab Emirates (UAE) economy of the objective of reducing its dependence on oil, trying to achieve the Gulf…
Abstract
Purpose
The main purpose of this paper is to understand the impact on the United Arab Emirates (UAE) economy of the objective of reducing its dependence on oil, trying to achieve the Gulf Cooperation Council (GCC) fiscal convergence criterion and the inevitable depletion of oil resources.
Design/methodology/approach
An 18 equation compact macro‐econometric model is constructed and is evaluated and calibrated employing dynamic simulation techniques. Optimal control techniques are used to analyze the economic impact of the three objectives listed above.
Findings
Each of the optimal control experiments that has been carried out has served to reinforce the fact that the UAE is still critically dependent on oil. An increase in the share of the non‐oil sector, adhering to the GCC fiscal criterion and any reduction in oil output production will affect government finances adversely.
Research limitations/implications
The macro‐econometric model developed is for the UAE and further research is needed to see if the conclusions can be generalized to the other oil exporting countries.
Practical implications
The estimated macro‐econometric model and the optimal control experiments indicate to the policy makers the need to continue the diversification of the economy and for government to actively explore and enhance non‐hydrocarbon sources of revenue.
Originality/value
This paper develops a compact macro‐econometric model of the UAE and uses optimal control techniques which go well beyond the standard simulation techniques and the routine counter‐factual experiments to understand the working of the economy.
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Wilfred W. H. Cheng, Chee Yeow Lim and Katherine C. K. Yuen
This study investigates the effect of honesty reminders on budgetary slack. Based on self-concept maintenance theory, the authors posit that honesty reminders can reduce budgetary…
Abstract
This study investigates the effect of honesty reminders on budgetary slack. Based on self-concept maintenance theory, the authors posit that honesty reminders can reduce budgetary slack by making people more aware of their own standards of honesty, resulting in more honest behavior. Using an experimental research design, the authors find evidence that honesty reminders reduce budgetary slack. The authors also find that although penalties can similarly reduce budgetary slack, they tend to cause distrust and resentment from subordinates. Therefore, honesty reminders may be a less costly method than penalties for reducing budgetary slack.
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