The Tax Compliance Cost for Businesses and its Key Determinants: Evidence from Greek Businesses
Keywords:
Tax Compliance Cost, Complexity, E-governmentAbstract
This paper aims to investigate the key determinants of the costs that arise for businesses during the voluntary tax compliance process in accordance with the current tax system’s requirements. Essentially, this work seeks to highlight the parameters of a “hidden” cost for businesses given, as seems particularly important, the peculiarities and weaknesses of tax system. Methodologically, the research was conducted using a representative sample of businesses operating in the Greek economy. A questionnaire was employed and the data obtained was processed using factor analysis. The results of the survey revealed that the two main factors that determine the cost of tax compliance are the complexity of the tax system and the level of electronic tax services provided by the tax administration. In practice, the recognition and analysis of these factors will make a decisive contribution to the reduction of businesses’ operating costs. This is necessary if businesses are to maintain their sustainability and achieve satisfactory growth rates, and thus be able to compete in the modern economic environment. This study is, to our knowledge, the first to examine the issue of the tax compliance costs in the Greek economy from this perspective, and lays the keystone for monitoring them on a more systematic and regular basis.
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