New Zealand Small Business Owners’ Attitudes on GST Compliance By Lynley Woodward
Abstract
The purpose of this study is to identify the factors that impact on compliance with GST by small business owners in New Zealand. A significant body of literature exists devoted to understanding the factors that impact on compliance with income tax by individuals both in New Zealand and overseas. More recently research has turned to other tax types and groups of taxpayers. This study aims to identify the factors that may be unique to small business taxpayers in New Zealand and GST specifically. A postal survey was administered to 300 randomly selected small business taxpayers. In addition eight small business owners agreed to be interviewed. Similar to studies involving individuals and income tax: equity issues, the perceived risk of audit, penalties and tax morale are identified as factors that influence small business taxpayers. In common with a 2001 UK study on VAT compliance by Caroline Adams and Paul Webley, evidence of mental accounting (whether taxpayers consider the GST belongs to themselves or to the Inland Revenue) also emerged as an additional factor that may influence compliance.
