Can E-Filing Reduce Tax Compliance Costs in Developing Countries?

Can E-Filing Reduce Tax Compliance Costs in Developing Countries?

The purpose of this study is to investigate the association between electronic filing (e-filing) and the total tax compliance costs incurred by small and medium size businesses in developing countries, based on survey data from South Africa, Ukraine, and Nepal. A priori, most observers expect that use of e-filing should reduce tax compliance costs, but this analysis suggests that the assumption should be more nuanced. In particular, policies that require business taxpayers to submit paper-based information in addition to their e-filing roughly negate savings that would otherwise be realized. In addition, adoption of e-filing requires an up-front investment by the business not only in capital assets, but also in the time, effort, and resources required to learn how to use e-filing properly and efficiently. Small businesses, in particular, are likely to face a steep "learning curve" and should probably not be forced to use e-filing before the majority of them have access to computers (with reliable electricity service) and have had a chance to become familiar with both computer use and the Internet.

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Bibliographic Details
Main Authors: Yilmaz, Fatih, Coolidge, Jacqueline
Format: Policy Research Working Paper biblioteca
Language:English
en_US
Published: World Bank, Washington, DC 2013-10
Subjects:ACCOUNTANT, AUDITS, BANK ACCOUNT, BANK ACCOUNTS, BANK POLICY, BOOK REVIEW, CAPITAL ASSETS, CAPITAL INVESTMENT, COMPLIANCE COST, COMPUTERS, CONNECTIVITY, CORPORATE INCOME TAXES, COSTS SAVINGS, DATA AVAILABILITY, DEVELOPING COUNTRIES, DOCUMENTS, ELECTRONIC FILING, EMPLOYMENT TAX, EMPLOYMENT TAXES, EXCLUSION, FILING, FOREIGN MARKETS, GOVERNMENT POLICY, GROSS DOMESTIC PRODUCT, HOLDING, INCOME TAX, INCOME TAXES, INFRASTRUCTURE DEVELOPMENT, INTERNATIONAL BANK, INTERNATIONAL TRADE, INVESTMENT CLIMATE, MANUFACTURING INDUSTRIES, MARKET CONDITIONS, NATIONAL TREASURY, OUTSOURCING, PAYROLL TAXES, PERSONAL INCOME, PERSONAL INCOME TAXES, POLITICAL STABILITY, PROBABILITY, REAL ESTATE, RESEARCHERS, SAVINGS, SKILLED WORKER, SKILLED WORKERS, SMALL BUSINESSES, SOCIAL FUND, SOCIAL FUNDS, TAX, TAX ACCOUNTING, TAX ADMINISTRATION, TAX COMPLIANCE, TAX COMPLIANCE COSTS, TAX FORMS, TAX LEGISLATION, TAX REGIME, TAX REGULATIONS, TAX REPORTING, TAX REPORTS, TAX RESEARCH, TAX RETURNS, TAX SIMPLIFICATION, TAX SYSTEM, TAX SYSTEMS, TAXATION, TAXPAYERS, TURNOVER, TURNOVER TAX, USERS, VALUE ADDED TAXES, VARIABLE COSTS, WITHHOLDING TAXES,
Online Access:http://documents.worldbank.org/curated/en/2013/10/18365604/can-e-filing-reduce-tax-compliance-costs-developing-countries
http://hdl.handle.net/10986/16861
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Summary:The purpose of this study is to investigate the association between electronic filing (e-filing) and the total tax compliance costs incurred by small and medium size businesses in developing countries, based on survey data from South Africa, Ukraine, and Nepal. A priori, most observers expect that use of e-filing should reduce tax compliance costs, but this analysis suggests that the assumption should be more nuanced. In particular, policies that require business taxpayers to submit paper-based information in addition to their e-filing roughly negate savings that would otherwise be realized. In addition, adoption of e-filing requires an up-front investment by the business not only in capital assets, but also in the time, effort, and resources required to learn how to use e-filing properly and efficiently. Small businesses, in particular, are likely to face a steep "learning curve" and should probably not be forced to use e-filing before the majority of them have access to computers (with reliable electricity service) and have had a chance to become familiar with both computer use and the Internet.

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