Compliance Costs Are Larger Than Actual Tax In Developing Countries. ideas.repec.org/p/ttp/itpwps/0508.html www-2.rotman.utoronto.ca/iib/ITP0508.pdf Compliance costs: In addition to imposing costs of enforcement and collection, tax regimes impose compliance costs on taxpayers, over and above the costs of actually paying taxes. Compliance costs are incurred by persons who have reporting or withholding obligations – for example, employers withholding income taxes from employees and banks that collect and remit taxes to government. Costs include the financial and time costs of complying with the tax law, such as acquiring the knowledge and information needed to do so, setting up required accounting systems, obtaining and transmitting the required data, paying professional advisors, and so on. Attempts to measure such costs are still in their infancy, but studies in developing countries find that, on average, compliance costs in these countries are perhaps four to five times larger than the direct administrative costs incurred by governments. One study, which focused on India, suggests that compliance costs may be considerably higher in developing countries. Compliance costs are generally regressively distributed, and are typically much higher for taxes collected from smaller firms. Moreover, like administrative costs, compliance costs vary with different types of income, and those associated with non-wage income can be especially high.
Posted on: Sun, 23 Jun 2013 18:32:14 +0000
Recently Viewed Topics
© 2015