Tax Compliance by Design

Achieving Improved SME Tax Compliance by Adopting a System Perspective

image of Tax Compliance by Design

This study introduces the concept of “Tax Compliance by design”. It describes how revenue bodies can exploit developments in technology and the ways in which modern SMEs organise themselves to incorporate tax compliance into the systems businesses use to manage their financial affairs.


Executive summary

Revenue bodies have long recognised the importance of finding better ways of securing good tax compliance by small and mid-sized enterprises (SME). They spend a large proportion of their limited resources on this taxpayer segment but increasingly cannot afford to deal with SME on a one-to-one basis. However, SMEs matter a great deal economically and they find the costs of complying with tax regulations burdensome. Those costs tend to be higher as a proportion of their total operating costs than they are for larger enterprises and the rules are often perceived to be very complex. This can affect SME’s ability to grow, their resilience in a crisis and, of course, their compliance with tax laws. The search for increased economic growth and cost savings in tax administration mean this issue is increasingly urgent.


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