Tax Compliance And Smes Economics Essay

Tax Compliance And Smes Economics Essay According to Marti (2010) tax compliance is a complex term to define. Simply put, tax compliance refers to fulfilling all tax obligations as specified by the law freely and completely. It has been found that regulatory burdens fall disproportionately on small and medium enterprises internationally (Pope Abdul-Jabbar, 2008). Their size and nature makes the issue of tax compliance one of particular importance especially since most SMEs have access to limited resources and inadequate expertise to comply with diverse and complicated regulation. He also believes that high compliance costs can result in tax avoidance, tax fraud, and inhibit investment by way of diminishing competitiveness of the country in terms of taxation attractiveness. Tax non-compliance may be in one of many forms; it could either be failure to submit a tax return within the stipulated period or non submission, understatement of income, overstatement of deductions, failure to pay assessed taxes by due date. (Kasipillai Abdul Jabbar, 2006) and in some cases non-compliance may mean an outright failure to pay levied taxes. Studies have shown that the problem of tax evasion is a widespread one (Kasipillai Abdul Jabbar, 2006). Furthermore, Fagbemi, Uadile Noah (2010) found that it is prevalent in developing countries and it hinders development thereby leading to economic stagnation and other socio-economic problems. Chipeta (2002) identified tax rates as one of the causes of tax evasion. He pointed out that a higher tax rate increases taxpayers burden and reduces their disposable income therefore, the probability of evading tax is higher. 2.5 Tax Policy and Level of Voluntary Compliance among SMEs Small taxpayers under the regular system of taxation are discriminated against, since the compliance requirements, cost of compliance and tax rate are the same for both small and large enterprises. Reducing the compliance costs and tax rate increases the small enterprises profit margin. It also increases the Governments tax revenue, since the simplified provisions for small and medium enterprises reduce the size of the informal economy and the number of non-complying registered taxpayers (Vasak, 2008). Furthermore, SMEs usually have to operate in an overbearing regulatory environment with the plethora of regulatory agencies, multiple taxes, cumbersome importation procedure and high port charges that constantly exert serious burden on their operations. An overly complex regulatory system and tax regime or one opaque in its administration and enforcement makes tax compliance unduly burdensome and often have a distortionary effect on the development of SMEs as they are tempted to morph into forms that offer a lower tax burden or no tax burden at all (Masato, 2009), and this results in a tax system that imposes high expenses on the society. A poorly executed tax system also leads to low efficiency, high collection charges, waste of time for taxpayers and the staff, and the low amounts of received taxes and the deviation of optimum allocation of resources (Farzbod, 2000). Existing empirical evidence clearly indicates that small and medium sized businesses are affected disproportionately by these costs: when scaled by sales or assets, the compliance costs of SMEs are higher than for large businesses www.ccsenet.org/ijbm International Journal of Business and Management Vol. 7, No. 12; June 2012 Published by Canadian Center of Science and Education 91 (Weichenrieder, 2007). 2.6 Tax Policy that will Encourage Voluntary Compliance by SMEs SMEs constitute untapped revenue potential and an uneven playing field in many countries (International Tax Dialogue, 2007) as such they need to be captured by the tax net. However, though legislations are necessary regulator for protection of the business environment and security of the economic agents, for establishment of the necessary social security regulations, they may also hamper compliance and the growth of business through additional expenditures and administrative obstacles. Thus Shahroodi, (2010) stated that for a tax system to be efficient, the tax policy needs to be designed such that the tax rates are appropriate and rational, the exemptions are lower in amount, the tax collection organization are more efficient, the tax burden of the indigent people should be lighter and the fight against corruption and tax evasion should be much more intense. Tax policies can be designed in such a way that they do not only directly affect SMEs but also indirectly push for voluntary compliance and their growth. Yaobin (2007), emphasized declared that special tax regimes for SMEs may be appropriate policy instruments for minimizing the cost of collection. Because awareness of the dangers of inadequate taxation of SMEs has grown because of the potential of uneven tax enforcement to cause distortions of competition, voluntary compliance by larger enterprises and by wage earners, (International Tax Dialogue, 2007), government intervention should help maintain balance while ensuring that countries exploit the social benefits from greater competition and entrepreneurship. Pro-business (and Pro-SME) Tax regimes and enforcement should be simple, consistent and predictable should to lower compliance and administrative costs, and hence reduce uncertainty faced by taxpayers as well as improve the levels of voluntary compliance (Kasipillai, 2005). 2.7 Theories of Tax Compliance Various opinions exist about the best ways to improve tax compliance. Given the chance, a lot of businesses will not pay taxes unless there is a motivation to do so. Some believe that the best way is to increase incentives (Feld Frey, 2007) others believe the best way is to increase penalties. Tax compliance theories can be broadly classified into two. They are; economics based theories and psychology based theories. 2.7.1 Economic Based Theories They are also known as deterrence theory and they place emphasis on incentives. The theory suggests that taxpayers are amoral utility maximizers- they are influenced by economic motives such as profit maximization and probability of detection. As such they analyze alternative compliance paths for instance whether or not to evade tax, the likelihood of being detected and the resulting repercussions and then select the alternative that maximises their expected after tax returns after adjusting for risk. This process is referred to as playing the audit lottery by Trivedi and Shehata (2005). Therefore according to the theory, in order to improve compliance, audits and penalties for non-compliance should be increased. 2.7.2 Psychology Theories Psychology theories on the other hand posit that taxpayers are influenced to comply with their tax obligations by psychological factors. They focus on the taxpayers morals and ethics. The theories suggest that a taxpayer may comply even when the probability of detection is low. As opposed to the economic theories that emphasize increased audits and penalties as solutions

Ghosts †Seeing is Believing :: Personal Narrative, Autobiographical Essay

Ghosts – Seeing is Believing   Ã‚  Ã‚  I live in a ghost hallway. They come and go whenever they want, like the transparent, blow-away wings of bees. Their spirits hover inside this house on Mechanic Street like a twilight hue filling a wine glass. I live more or less inside their moods, which they carry behind them in traces of light that flood the panes one window at a time and the creaky flutes of rusty hinges. The ghosts don't say â€Å"boo† and they don't swing chains. They're good ghosts as far as I can tell, calm as a cup of tea, considerate and watchful and able to pay attention to the least thing for many hours. I like how they watch me read without telling me what to think; I like how they touch my mind with ghost memories, laughing and smoking on the porch with their neighbors. I like how they stared out these same windows serious and alone in their own thoughts, unable to share with each other the deepest parts of themselves because the inner commotion was too great to put into words. I s ee how after a fight or death in the family they sat by themselves in the living room, wanting things to be good again, wanting to be healed but not being able to do anything but wait.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  What they have left behind is shorn of all eventfulness as if what happened here long ago in this quasi-dilapidated shotgun house still lingers on as after-tone slowly turning into something else, the echo of their memories which I navigate now with a cup of coffee and a three-day beard. I'm doing a soft-shoe in my slippers through their long recollections, the fog that hangs in the trees between dreams. They heard the same front door whine and clatter and the soft thudding of footfalls on the sidewalk: they heard the wind in the trees and the wash of rain tearing through them on its way to another season carrying a hundred small deaths in its wake. Their senses are alive in mine, just as mine are remade in the memory of theirs. It's a mysterious transference that I do not understand. I don't necessarily like to feel the pangs of sorrow the woman felt that beetled up and down her spine like a slug of mercury, finding her defenseless in her own house at different times in her life, like a painful sickness that keeps coming back. Ghosts – Seeing is Believing :: Personal Narrative, Autobiographical Essay Ghosts – Seeing is Believing   Ã‚  Ã‚  I live in a ghost hallway. They come and go whenever they want, like the transparent, blow-away wings of bees. Their spirits hover inside this house on Mechanic Street like a twilight hue filling a wine glass. I live more or less inside their moods, which they carry behind them in traces of light that flood the panes one window at a time and the creaky flutes of rusty hinges. The ghosts don't say â€Å"boo† and they don't swing chains. They're good ghosts as far as I can tell, calm as a cup of tea, considerate and watchful and able to pay attention to the least thing for many hours. I like how they watch me read without telling me what to think; I like how they touch my mind with ghost memories, laughing and smoking on the porch with their neighbors. I like how they stared out these same windows serious and alone in their own thoughts, unable to share with each other the deepest parts of themselves because the inner commotion was too great to put into words. I s ee how after a fight or death in the family they sat by themselves in the living room, wanting things to be good again, wanting to be healed but not being able to do anything but wait.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  What they have left behind is shorn of all eventfulness as if what happened here long ago in this quasi-dilapidated shotgun house still lingers on as after-tone slowly turning into something else, the echo of their memories which I navigate now with a cup of coffee and a three-day beard. I'm doing a soft-shoe in my slippers through their long recollections, the fog that hangs in the trees between dreams. They heard the same front door whine and clatter and the soft thudding of footfalls on the sidewalk: they heard the wind in the trees and the wash of rain tearing through them on its way to another season carrying a hundred small deaths in its wake. Their senses are alive in mine, just as mine are remade in the memory of theirs. It's a mysterious transference that I do not understand. I don't necessarily like to feel the pangs of sorrow the woman felt that beetled up and down her spine like a slug of mercury, finding her defenseless in her own house at different times in her life, like a painful sickness that keeps coming back.

Descartes ; Hume’s Theory on Knowledge

Knowledge is the things that one has taken into itself and made the decision to believe that it is true. This leads to the question, what makes certain obtained pieces of knowledge true? Descartes would doubt everything until he came to an absolute and undeniable truth. If he had any reason to doubt something, it could not be true knowledge. Descartes then discovered one thing that he could not doubt and that is â€Å"I think, therefore I am. † He says that if he can think, then he knows that he exists. I agree and disagree with Rene Descartes theory of how we have knowledge.Just because you have doubt about something does not necessarily mean there is no knowledge of it. What one may doubt, another person may have knowledge of. So is that person’s knowledge false? I say no. There are many situations like that. One may doubt the existence of God, but I do not doubt it. Since we all have our own beliefs, it does not mean one is wrong. So I do not agree with him saying th ere is no knowledge of things that he has the slightest doubt about. I do agree with his famous line â€Å"I think, therefore I am. † If one has the brain activity to think, then yes they do exist and that is certain.Since I am thinking, then I do have knowledge that I certainly exist. On the other hand, if one is in a coma then I still do believe that they exist. If you are living, breathing and your heart is beating then you without doubt exist even though you are not really thinking. One in a coma does have the ability to think once out of the coma so therefore they still exist. Hume was an empiricist and he believed that all knowledge comes through experience. If you want to know anything about what the world is like, you have to go out and explore; you cannot simply sit, think really hard and hope to come up with knowledge.He believed, along with the fact that knowledge is learned through experience, that a person's experiences are nothing more than the subjects of his o r her own perception. The knowledge of anything comes from the way it is observed through the five senses. Hume began to differentiate between feelings and thoughts. Feelings are only impressions made upon the body, and thoughts arrive from impressions; meaning you cannot have feelings on things you have not experienced. I do agree that one can gain knowledge through experiences, but also through being taught what we learn in school.In order for us to be taught things in school one had to experience the scientific study, math equation or whatever the material consisted of. People did not just come up with these facts on his/her own. They spent a lot of time researching and experiencing them to gain knowledge about whatever they learned. We do gain knowledge from things we experience on our own as well. The saying â€Å"People learn from their mistakes† is the perfect example. A child touches a hot stove and burns their hand, in doing so; they learn not to touch it because the y will remember what happened. In this case, they do learn from an experience.

Southside Community Center Literature Review - 1502 Words

Southside Community Center Literature Review Samantha Tratchel Texas State University Southside Community Center Literature Review According the U.S. Department of Housing and Urban Development (HUD), 549,928 people were experiencing homelessness on a single night in January 2016 (Henry, Watt, Rosenthal Shivji, 2016). Families account for 37% of the homeless population (Holtrop, Mneil McWey, 2015). Although the exact number of the homeless population in Hays County is currently unknown, the Hays County Food Bank (2016) reports show 25,120 residents are considered food insecure, including 8,990 children. Approximately 37 percent of the population in San Marcos lives below the federal poverty line, compared with 17.4 percent†¦show more content†¦Homeless individuals experience poorer mental and physical health statuses along with lower life expectancies when compared to those who have stable housing (Jones, Zur, Rosenbaum, 2015). Studies have shown families experiencing homelessness have higher levels of parental distress, elevated rates of child welfare involvement, greater incidence of parent-child separation, less social support, and an increased risk for emotional, behavioral, and developmental problems in children (Holtrop, McNeil McWey, 2015). Theory Human Capital Theory As explained by Nafukho, Hairston and Brooks (2004), human capital theory considers the training and education of individuals as an investment, and the benefits involve increased individual earnings, improved organizational productivity, and benefits to society as a whole. Benefits to society include both economic growth, and non-monetary societal benefits such as better health, less crime, and an increase in civic participation (Nafukho, Hairston, Brooks, 2004). Homelessness can be contributed and not limited to generational poverty and homelessness, lack of education, abuse, a crisis, poor family support, mental illness, and/or substance abuse (Holtrop, McNeil, Mcwey, 2015). Many of these issues go hand-in-hand with homeless individuals and theShow MoreRelatedQuality Management At Florence Nightingale2770 Words   |  12 Pagesefficient, and effective health care. Many strategies have been used to evaluate quality in order to achieve optimal care for the customers using these he alth care organizations. Literature Review Quality must be continually maintained and evaluated for effectiveness in order to meet the expectations of the individuals, communities, and populations the health organizations serve. Quality management began when Florence Nightingale identified professional goals and techniques to provide safe and caring environmentsRead More A Raisin in the Sun, by Lorraine Hansberry Essay1839 Words   |  8 Pagesfor which the characters receive no label of race, many commonalities can be found between the characters’ personalities and their beliefs. Such similarities prove that A Raisin in the Sun is not merely a play intended to appeal only to the black community, nor should it be construed as a story about the plights of the black race alone, but instead should be recognized as a play about the struggles that all families, regardless of race, must endure in regard to their diversity and financial disparityRead MoreThe Government and Not-For-Profit Environment100975 Words   |  404 PagesTechnical Bulletins, AICPA Industry Audit Guides, FASB Implementation Guides, other accounting literature—including GASB Standards. b) FASB Statements and Interpretations, FASB Technical Bulletins, FASB Implementation Guides, AICPA Practice Bulletins (if cleared by FASB). c) GASB Statements and Interpretations, AICPA Industry Audit Guides, GASB Implementation Guides, other accounting literature—including FASB Standards. d) GASB Statements and Interpretations, GASB Technical Bulletins