Taxing the Informal Economy: Challenges, Possibilities and Remaining Questions

Joshi, Anuradha; Prichard, Wilson; Heady, Christopher

doi:10.2139/ssrn.2408587

Cited by 17 publications

(15 citation statements)

References 43 publications

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“…According to Kiow, Salleh, and Kassim (2017) it is a form of unintentional omission of information in preparing tax returns and other forms of lack of tax awareness by the taxpayers. Therefore, the continuous and persistence of noncompliance by taxpayers in the informal sectors could be attributed to various factors that required study and solution (Joshi, Prichard, & Heady, 2014).…”

Section: Conceptual Reviewmentioning

confidence: 99%

Quality of Tax Services, Moderated by Trust in State Internal Revenue Service and Voluntary Tax Compliance Behaviour among Individual Taxpayers in South-West, Nigeria

Augustine

Folajimi

Ayodele

2020

Journal of Accounting, Business and Finance Research

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Research on tax compliance is of economic, social and political benefit to the government and the citizens. Constant loss of tax revenue due to level of Quality of Tax Service (QTS) rendered by tax authority is perceived to have adversely affected nation's revenue generation and infrastructural development.Researches have been carried out on taxpayers' compliance, but not many considered the effect of QTS in their study. This studied looked at the probable influence of QTS on taxpayers' Voluntary Tax Compliance (VTC) behaviour in South-West, Nigeria. The study used survey research design with study population of 5,216,422 individual taxpayers. Data were collected with validated questionnaire by means of random sampling techniques. Sample size of 1,200 was used with a response rate of 87.6%. Descriptive and inferential statistics were used to analyse data at 5% significance level. The study revealed that QTS positively influenced VTC among individual taxpayers in the study states (Adj.R 2 =.117, F(6, 1050) =24.139, p =.000). There was evidence that trust in State Internal Revenue Service, QTS and employment status have significant relationship with VTC behaviour while gender, age and educational level do not have significant relationship with VTC in the study states respectively. The study concluded that QTS influenced VTC. Therefore, lack of tax awareness, tax education/information and poor tax service delivery was responsible for tax non-compliance. The study recommended that government should carry out tax education/information and tax awareness to taxpayers while tax officials should apply the concept of public management to tax service delivery.

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Section: Conceptual Reviewmentioning

confidence: 99%

Quality of Tax Services, Moderated by Trust in State Internal Revenue Service and Voluntary Tax Compliance Behaviour among Individual Taxpayers in South-West, Nigeria

Augustine

Folajimi

Ayodele

2020

Journal of Accounting, Business and Finance Research

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“…Relative to transmission channels, formalisation is assumed to benefit the firms through increased access to credit, greater opportunities to engage with large firms and the government, or greater access to training and support programmes (Joshi, Prichard, & Heady, 2012); but the existing evidence is mixed. McKenzie and Sakho (2010) find that higher profits due to registration appear to come mainly from increase in customer base; and there was no impact of formalisation on the prospect of obtaining a bank loan.…”

Section: Literature Reviewmentioning

confidence: 99%

“…There are a number of possible channels through which formality can have a positive impact on firm performance. These channels include access to credit, greater opportunities to engage with large firms and the government, greater access to training and support programmes (Joshi et al, 2012); the opportunity to enlarge customer base and lower the costs of corruption (McKenzie & Sakho, 2010); or the ability to lower the cost of contracting labour (Fajnzylber et al, 2011). Previous studies have typically considered these transmission channels as conduits to higher firm performance; but, they may also constitute reasons why a firm may have switched out of the informal sector.…”

Section: Transmission Channelsmentioning

confidence: 99%

On the Short- and Medium-Term Effects of Formalisation: Panel Evidence from Vietnam

Boly

2017

The Journal of Development Studies

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This paper analyses the consequences of formalisation on the performance of informal firms, using a panel dataset from Vietnam. We find that switching firms (before switching) have higher profit and value added compared to non-switching firms; suggesting heterogeneity. Becoming formal leads to an additional increase in switching firms' profit and value added. The benefits of formalisation materialise in the short-term (one year) and persist in the longer-term (three or more years). These benefits run through various channels such as better access to powered equipment or higher business association membership; but not better access to credit.

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“…As reported by column 2 of Table 2, formal firms' profits rise approximately 12% higher in comparison with informal firms', keeping other factors constant. It can be argued that becoming formal leads to increased access to credit, greater opportunities to engage with large firms and the government, or greater access to training and support programmes (Joshi, Prichard, & Heady, 2013). As a result, there is a positive linkage between formalization and firm profitability.…”

Section: Empirical Results and Discussionmentioning

confidence: 99%

Government Support and Firm Profitability in Vietnam

Nguyen

Tran

Thanh

2018

CER

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Existing studies on the linkage between government subsidies and firm financial performance often use a mean regression approach and focus mainly on developed countries. To fill the gap, this study, for the first time, considers the impact of government support activities on the profitability of manufacturing SMEs in a developing country, Vietnam. Using an unbalanced panel dataset covering the period 2009–2015, government financial supports show an insignificant linkage with firm profitability when using OLS. However, a fixed‑effect quantile approach reveals that government financial support is negatively related for firms with low profit but is positively related for firms in the high profitability percentile. Our findings also suggest that policymakers should focus on helping start‑ups instead of ineffective, informal firms.

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Taxing the Informal Economy: Challenges, Possibilities and Remaining Questions

Cited by 17 publications

References 43 publications

Quality of Tax Services, Moderated by Trust in State Internal Revenue Service and Voluntary Tax Compliance Behaviour among Individual Taxpayers in South-West, Nigeria

Quality of Tax Services, Moderated by Trust in State Internal Revenue Service and Voluntary Tax Compliance Behaviour among Individual Taxpayers in South-West, Nigeria

On the Short- and Medium-Term Effects of Formalisation: Panel Evidence from Vietnam

Government Support and Firm Profitability in Vietnam

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