Measuring the managerial benefits of tax compliance : a fresh approach

Managerial benefits of tax compliance have been identified by many authors in the tax compliance costs literature; they have however often been ignored when measuring the net effect of tax compliance on business taxpayers because it was believed that the measurement of such benefits was impossible or difficult. This paper first discusses the theoretical issues surrounding the valuation of managerial benefits, including the related tax/ accounting costs overlap problem; it then proposes a fresh approach for measuring managerial benefits. The proposed measurement model incorporates a subjective evaluation of useful accounting information by owner‑managers and objective measurements of accounting costs. Two main components of managerial benefits are identified: the incremental value of managerial accounting information and the savings on reporting costs. A study of small businesses conducted in late 2006, compared accounting practices between tax complying entities (TCEs) and tax compliance free entities (TFEs) and investigated how accounting information was valued by owner-managers in TCEs. The research adopted a mixed methodological design including a major quantitative phase followed by a minor qualitative phase. The results show that while a vast majority of TFEs maintained basic accounting functions, record keeping requirements imposed by tax compliance led to the implementation of more sophisticated accounting systems in TCEs. It was also found that TCE owner-managers assigned a relatively significant value to the managerial accounting information that is generated as a result of record keeping imposed by tax compliance, suggesting that substantial managerial benefits might be derived.

The managerial benefits of tax compliance: perception by small business taxpayers

Research undertaken in 2006 – 2007 investigated the perception of managerial benefits of tax compliance by small business taxpayers. Survey data from a sample of 300 small business taxpayers and responses to semi-structured interviews of owner managers were examined. The study found that a majority of small business taxpayers recognised that tax compliance activities led to better record keeping and to an improved knowledge of their financial affairs. However, there seemed to be a general reluctance by respondents to accept the idea that benefits could be derived as a result of complying with tax. The findings of this study are important as it is the first research that systematically investigated managerial benefits and their perception by small business taxpayers in Australia.

Lighter than Tai

YEAR: 2008 ROLE: Performer FORMAT: Live Art Event at Tiananmen Square Beijing, China (3 hours) and Later on Summit of Mt. Tai Shan, Shandong Province, China (6 hrs + 3 hrs). WITH: Solo WHAT: In the Hall of Reverence on Tiananmen Square, Beijing Mao Zedong's body lies in state surrounded by flowers and draped with a Red Flag of Communist China. His casket with a glass top lies on a black stone from Mt. Tai, reflecting the quotation from Sima Qian (China's Han Dynasty historian) that "One's life can be weightier than Mt. Tai or lighter than a goose feather". This pair of performances were a quiet, personal reflection upon what such a once revolutionary expression might mean in today's very different time and place. The work was conceived during the Olympic Cultural Festival showing of Intimate Transactions (www.intimatetransactions.com) - during the tumultuous times leading up to China's proudly staged August 2008 Olympics. The rise and rise of China had long been generating major geopolitical, ecological and cross-cultural shifts throughout the region and beyond. In this dramatic epicentre of change and at a time of such great national pride, how might we each act in ways that are ecologically 'mighty' and yet simultaneously have an impact lighter than a goosefeather? This is both a question for China in its relations with the autonomous provinces and the environment as it is for all of us in our own 'local' affairs. However ecologically speaking all that is of local concern is of global concern and noone can therefore be exempt from the need to sustain that which we share in common and must all protect for the future. Performance 1: Tiananmen Square, Beijing: Dropping 100 goose feathers. Performance 2: The summit of Mt Tai, Shandong Province. Building a mountain from Goose Feathers. SHOWING HISTORY: 1: Anniversary of Protest Crackdown, Jun 8th 2008. 2: Dawn on Tai Shan's summit, 15th June, 2008 DETAILS: Performance 1: Begin an hour after dawn (5.45am) in Tiananmen Square Bring pre-prepared performance shirt, a bag of goose feathers tipped with red. Begin at the "Gate of Heavenly Peace" under the image of Chairman Mao. Circumnavigate the world's largest open and the most surveilled public space 5 times dropping feathers periodically. Meditate on Forces of Change. Finally enter Chairman Mao's mausoleum with the masses and move quietly past his preserved body. End the performance at the Gate of Heavenly Peace 3 hours later. Performance 2: Walk up Mt. Tai Shan in silence meditating on Forces of Change (6 hours). Stay overnight on the summit. Begin an hour before dawn (3.45am) in silence. Bring performance shirt, a sack of goose feathers and a simple wooden structure. On the sunrise viewing side of the mountain build a miniature, fragile 'mountain' in goose feathers and sticks on the edge of a sheer precipice. Watch the sun rise as the feathers blow away into the valley deep below (3 hours).