Perceptions of Tax Compliance by SMEs and Tax Practitioners in New Zealand : A Divergent View?

Despite the economic importance of small and medium enterprises (SMEs), little is known about their tax compliance perceptions, which may influence their compliance behavior. This is particularly so in relation to comparing the tax perceptions of New Zealand SMEs and their tax practitioners. This article reports on a qualitative study which examined the tax compliance perceptions of New Zealand SMEs and their tax practitioners. The findings of this study reveal that SMEs' perceptions of tax compliance are multifaceted and include legal factors, compliance costs, economic considerations and perceptions of “others”. On the other hand, tax practitioners generally have a narrow context focusing mainly on compliance cost and legal obligations. The tax policy implications from this study include that it can potentially assist tax authorities to design and implement strategies to influence SMEs' compliance behaviors. Also, for tax practitioners it illustrates their important role in reducing the stress of their SME clients by assisting them through education, including how to use accounting reports for compliance and business control purposes