Ensuring Tax Compliance Research Articles

The Influence of Corporate Governance on Tax Avoidance and The Role of Independent Auditors in Vietnamese Firms

This research addresses how corporate governance mechanisms influence tax avoidance in Vietnamese firms and the role of independent auditors in detecting or mitigating tax avoidance. The purpose of the research is to explore the relationship between corporate governance structures (e.g., independent boards, audit committees) and tax behavior, as well as to assess how auditors interact with these governance mechanisms to ensure tax compliance. A qualitative case study approach was used to analyze six companies from different sectors and governance models (2 state-owned enterprises; 2 family-owned private companies; and 2 publicly listed companies) through 18 interviews conducted between May 2024 and October 2024 with 3 key individuals from each company, including: Independent auditor; Company CEO; Manager or administrator, along with documentary analysis of financial statements and tax filings. The research found that firms with stronger governance (e.g., independent boards and active audit committees) are less likely to engage in tax avoidance, while weak governance structures often lead to more aggressive tax strategies. Independent auditors were more effective in well-governed firms, but faced ethical challenges in weaker ones. These findings are significant because they highlight the importance of strengthening governance frameworks and ensuring auditor independence to reduce tax avoidance and improve corporate transparency in Vietnam.

Taxing High-Net-Worth Individuals: Recommendations from an African Perspective

In this article, the author considers how African countries can increase their tax base by taxing “high-net-worth individuals” (HNWIs), a small but growing segment of society that has the potential to contribute to revenue collection but is largely undertaxed. While the article sets out the justifications for African countries to focus on the taxation of HNWIs, it also notes that countries generally face various challenges in taxing HNWIs. To address the challenges, the article refers to some international guidelines that African countries can adopt in order to effectively tax HNWIs. With South Africa being the country on the continent with the highest number of HNWIs, the article focuses on the approach it has taken to tax HNWIs, in the hope that South Africa’s success story can be emulated by other African countries that face challenges in ensuring tax compliance by HNWIs.

LEGAL FRAMEWORKS AND TAX COMPLIANCE IN THE DIGITAL ECONOMY: A FINANCE PERSPECTIVE

In the wake of rapid digitalization, the landscape of commerce has undergone a profound transformation, presenting unprecedented challenges to traditional tax systems and legal frameworks. This abstract examines the evolving dynamics of tax compliance within the digital economy through the lens of finance. The digital economy encompasses a broad spectrum of economic activities facilitated by digital technologies, including e-commerce, digital platforms, and virtual currencies. These innovations have blurred the boundaries of traditional tax jurisdictions, leading to complexities in determining tax liabilities and enforcement mechanisms. As such, the adequacy of existing legal frameworks in addressing tax challenges posed by the digital economy has come under scrutiny. From a finance perspective, ensuring tax compliance in the digital economy involves understanding the intricate interplay between technology, business models, and regulatory frameworks. Digital businesses often operate across multiple jurisdictions, exploiting loopholes and jurisdictional discrepancies to minimize tax obligations. Such practices have raised concerns regarding tax fairness and the erosion of tax bases, prompting policymakers to explore new regulatory approaches. One key aspect of addressing tax compliance in the digital economy is the development of international cooperation and coordination mechanisms. Given the transnational nature of digital transactions, effective tax enforcement requires collaboration among countries to combat tax evasion and profit shifting. Initiatives such as the Base Erosion and Profit Shifting (BEPS) project by the OECD seek to establish common standards and guidelines for taxing digital businesses. Moreover, the emergence of innovative technologies, such as blockchain and artificial intelligence, presents both opportunities and challenges for tax authorities. While these technologies offer potential solutions for enhancing tax administration and enforcement, they also introduce new complexities, such as the anonymity of transactions and the difficulty of tracking digital assets. Navigating the complexities of tax compliance in the digital economy requires a multifaceted approach that integrates legal, technological, and financial perspectives. By fostering international cooperation, leveraging technological innovations, and adapting regulatory frameworks, policymakers can mitigate tax challenges and promote a fair and sustainable tax system in the digital age.
 Keywords: Tax, Digital Economy, Finance, Legal, Review.

LEGAL FRAMEWORKS AND TAX COMPLIANCE IN THE DIGITAL ECONOMY: A FINANCE PERSPECTIVE

In the wake of rapid digitalization, the landscape of commerce has undergone a profound transformation, presenting unprecedented challenges to traditional tax systems and legal frameworks. This abstract examines the evolving dynamics of tax compliance within the digital economy through the lens of finance. The digital economy encompasses a broad spectrum of economic activities facilitated by digital technologies, including e-commerce, digital platforms, and virtual currencies. These innovations have blurred the boundaries of traditional tax jurisdictions, leading to complexities in determining tax liabilities and enforcement mechanisms. As such, the adequacy of existing legal frameworks in addressing tax challenges posed by the digital economy has come under scrutiny. From a finance perspective, ensuring tax compliance in the digital economy involves understanding the intricate interplay between technology, business models, and regulatory frameworks. Digital businesses often operate across multiple jurisdictions, exploiting loopholes and jurisdictional discrepancies to minimize tax obligations. Such practices have raised concerns regarding tax fairness and the erosion of tax bases, prompting policymakers to explore new regulatory approaches. One key aspect of addressing tax compliance in the digital economy is the development of international cooperation and coordination mechanisms. Given the transnational nature of digital transactions, effective tax enforcement requires collaboration among countries to combat tax evasion and profit shifting. Initiatives such as the Base Erosion and Profit Shifting (BEPS) project by the OECD seek to establish common standards and guidelines for taxing digital businesses. Moreover, the emergence of innovative technologies, such as blockchain and artificial intelligence, presents both opportunities and challenges for tax authorities. While these technologies offer potential solutions for enhancing tax administration and enforcement, they also introduce new complexities, such as the anonymity of transactions and the difficulty of tracking digital assets. Navigating the complexities of tax compliance in the digital economy requires a multifaceted approach that integrates legal, technological, and financial perspectives. By fostering international cooperation, leveraging technological innovations, and adapting regulatory frameworks, policymakers can mitigate tax challenges and promote a fair and sustainable tax system in the digital age.
 Keywords: Tax, Digital Economy, Finance, Legal, Review.

Attitude towards Electronic Tax System and Value-Added Tax Compliance, the Mediating Effect of Adoption of the Electronic Tax System among Small and Medium Enterprises (SMEs) in Fort Portal City, Western Uganda

Purpose: This study aimed to examine the relationship between attitudes toward the electronic tax system and VAT compliance while assessing the mediating effect of the adoption of the electronic tax system among SMEs in Fort Portal City, Western Uganda.
 Materials and Methods: The study used a cross-sectional design, adopting a quantitative approach. The study used a survey method with a structured self-administered questionnaire to collect data from the managers. The study population comprised 297 SMEs, generating a sample of 165 SMEs in the Central and North Divisions of Fort Portal City. SMEs were selected by stratified simple random sampling while respondents were purposively selected. Pearson correlation and Hierarchical multiple regression analysis techniques were employed using SPSS version 22.
 Findings: The study established that the adoption of the electronic tax system partially mediates the relationship between attitudes towards the electronic tax system and tax compliance among SMEs in Fort Portal City. It was established that whereas attitudes towards e-tax system predict tax compliance, the effect is better felt through the adoption of the e-tax system.
 Implications to Practice and Policy: Premised on the technological acceptance model, the study has brought out the inevitable role the adoption of the e-tax system plays in explaining the relationship between attitude toward the e-tax system and tax compliance among small and medium enterprises. SMEs are urged to ensure tax compliance and maintain a good reputation through online registration, filing of tax returns, and prompt settlement of tax obligations to limit tax avoidance and incidental consequences.

Peculiarities of tax audits during martial law

Introduction. Tax audits are a crucial part of any country’s financial system, ensuring taxpayers comply with the law and pay their taxes on time. However, conducting tax audits during wartime can be complicated due to various factors. Ukraine, currently experiencing an extremely difficult period in its development due to the constant threat of war and geopolitical conflicts, serves as the context for this study. The purpose of the paper is to explore the unique challenges of conducting tax audits during wartime. It seeks to understand the changes in tax legislation and audit procedures during war, the increase in tax violations and abuses, and the challenges faced by fiscal authorities in ensuring tax compliance and maintaining budget stability. Results. The study reveals several key features of conducting tax audits during wartime, including changes in legislation, increased tax violations, challenges for fiscal authorities, and preparation for audits. Based on these findings, practical recommendations have been developed for businesses and taxpayers on preparing for tax audits during military operations. Conclusion. The paper concludes with the need for legislative adaptation, the use of technology to simplify the audit process, promoting transparency and mutual trust between tax authorities and taxpayers, and strengthening control over compliance with tax legislation. Despite the challenges that may arise during a state of war, compliance with tax legislation remains the obligation of every taxpayer.

Determinants of Post-Tax Audit Compliance in Ghana

Governments derive a significant portion of their income from taxation. Collection of tax is however impeded by tax non-compliant activities as well as tax evasion. This necessitates measures to ensure tax compliance, such as tax audits. The study looked into the factors that influence taxpayers' post-audit compliance behavior in Ghana, with the Ho and Hohoe Small Taxpayer Offices as a case study. The focus of the study was on the effectiveness of tax audit procedures, post-tax audit compliance behavior of taxpayers, and taxpayers' experience with tax officers during and after the first tax audit. To achieve this aim, the study utilized the case study method of research. The researcher used the purposive sampling technique to select respondents for the questionnaire survey. The primary goal of the research was to investigate the efficacy of tax audit methods. The study identified that tax audit procedures were most effective in the Ho and Hohoe Small Taxpayer offices. The effectiveness of the audit procedures was ensured through the thorough examination of all relevant books and documents by skilled auditors. The second purpose of the study was to investigate the post-tax audit compliance behaviour of taxpayers. The study found that, after the audit procedures, taxpayers started filing tax returns accurately and timely. This improvement was primarily due to the level of education provided by tax officers during tax audits. Finally, the last objective sought to examine taxpayers' experience with tax officers during and after the first tax audit. The study found that there were very few cases (11.40%) where respondents agreed that auditors compelled them to do something to reduce the tax. However, tax officers endeavored to provide legal backing and explanation for every decision made. The learning process that tax officers took taxpayers through has built a cordial relationship between the two parties. Tax audits, when structured to ensure proper collection of taxes, can lead to minimal tax avoidance and tax evasion and strict compliance with the applicable tax laws, and an enhanced degree of voluntary tax compliance.

The Extent to Which Financial Institutions Comply With The US FATCA Law


 
 
 
 
 
 
 
 
 
 This scientific article explores the challenges and risks faced by Iraqi banks in complying with the Foreign Account Tax Compliance Act (FATCA). The study aims to investigate the extent of compliance in Iraqi banks and examine the general framework of FATCA through document analysis and interviews with bank officials. The results reveal that while Iraqi banks encounter various challenges in adhering to FATCA, they are actively taking significant steps to implement the necessary changes. The study highlights the need for continued monitoring of compliance efforts and emphasizes the importance of adapting to the global banking system. The implications of this research underscore the crucial role of FATCA in preventing tax evasion and ensuring tax compliance among US taxpayers utilizing non-US financial institutions and investment vehicles abroad. This research contributes valuable insights for professionals in the field, policymakers, and researchers interested in understanding the impact of FATCA on the banking sector and its implications for global financial regulations.
 Highlights : 
 
 Challenges and risks faced by Iraqi banks in complying with FATCA.
 Active steps taken by Iraqi banks to implement necessary changes for FATCA compliance.
 Implications for preventing tax evasion and ensuring tax compliance in the global financial landscape.
 
 Keywords : FATCA Compliance, Iraqi Banks, Tax Evasion, Global Banking System, Financial Regulations
 
 
 
 
 
 
 
 
 
 

Appraisal of the Jurisdictional Issues Confronting Prosecutors of Tax Related Disputes and Constitutional Bottlenecks

Purpose: This paper examines the jurisdictional issues confronting tax enforcements, prosecution and other related issues. Jurisdiction over taxes administered at both the federal and state levels is determined by the legal personality of the taxpayer and place of residence for individuals. The Federal High Court, State High Courts and Tax Appeal Tribunal are vested with jurisdiction to hear and determine tax disputes. The Tax Appeal Tribunal is vested with jurisdiction to hear disputes arising from the operations of the Federal Inland Revenue Service. Tax disputes can be commenced either by the taxpayer or by the relevant tax authority. In practice, administrative channels within the relevant tax authority are usually the first step for resolution of tax disputes. Unresolved disputes proceed to the Tax Appeal Tribunal or Federal High Court, or where the tax is a State tax, to the State high court. The doctrinal research was used in carrying out this research.
 Methodology: Both secondary and primary sourced materials such as textbooks, journals, internets, case laws etc. were used.
 Finding: Finding reveals that there have been jurisdictional controversies confronting the constitutionality of TAT decision as well as the regular courts causing serious bottleneck for tax prosecutors.
 Recommendation: It is recommended that in order to ensure tax compliance, effective resolution of tax disputes and proper administration of tax system, the issue of jurisdiction must be clearly spelt out.

Audit lead selection and yield prediction from historical tax data using artificial neural networks.

Tax audits are a crucial process adopted in all tax departments to ensure tax compliance and fairness. Traditionally, tax audit leads have been selected based on empirical rules and randomization methods, which are not adaptive, may miss major cases and can introduce bias. Here, we present an audit lead tool based on artificial neural networks that have been trained and evaluated on an integrated dataset of 93,413 unique tax records from 8,647 restaurant businesses over 10 years in the Northern California, provided by the California Department of Tax and Fee Administration (CDTFA). The tool achieved a 40.1% precision and 58.7% recall (F1-score of 0.42) on classifying positive audit leads, and the corresponding regressor provided estimated audit gains (MAE of $155,490). Finally, we evaluated the statistical significance of various empirical rules for use in lead selection, with two out of five being supported by the data. This work demonstrates how data can be leveraged for creating evidence-based models of audit selection and validating empirical hypotheses, resulting in higher audit yields and more fair audit selection processes.

The viability of tax e-services in ensuring taxpayer compliance and its impact on revenue collection: A case study of ZIMRA

Purpose: The study sought to investigate the viability of tax e-services in ensuring tax compliance and increased revenue collection using ZIMRA Harare headquarters as a case study. Scholars shared their different ideas regarding the relationship between tax e-services and tax compliance and most of them were in agreement that the two variables yield a positive relationship. Methodology: The descriptive design, which is a component of the mixed approach, was adopted since it incorporates both quantitative and qualitative approaches. Questioners and interviews were used to collect data. Findings: The results revealed that there is a positive relationship between e-filing, revenue collection and tax compliance. It emerged that e filing, tax compliance and revenue collection have a strong positive relationship. Originality/Value: Companies should adopt the electronic tax filing system to enable better tax compliance levels and revenue collection.

Responsive tax administration model and tax compliance

The subject.The author studies models of tax administration.The purpose of the articleis to confirm or refute hypothesis that successful tax administration strategy consists a balanced combination of tax enforcement measures and positive incentives.The methodologyof the study includes content analysis of the scientific papers prepared by European and American lawyers and economists.The main results, scope of application. Tax compliance is an essential component of a wellfunctioning tax system. The forms and methods by which states ensure tax compliance, and taxpayers try to avoid paying taxes, change significantly over time, due to the modernization of tax policy, changes in the alignment and transformation of economic forces, institutions, norms and technologies, Historically, tax relations have always been strictly vertical and hierarchical, relying on administrative-command methods of tax administration, and also characterized by retrospective tax audits and the threat of imposing harsh sanctions to ensure tax compliance. The one-sided nature and lack of flexibility of such a model, limited by the triad of regulatory instruments “obligation – control – responsibility”, was initially subjected to comprehensive criticism in the scientific community.Revolutionary transformations in public administration practice have an impact on all aspects of tax interactions, including tax compliance and tax administration. The global trend lies in the understanding that tax administration, in essence, should be expressed not in the confrontation between taxpayers and tax authorities, but in their dialogue, interaction and cooperation.The flexible tax administration model is based on new approaches to public administration based on a shift in emphasis from coercion to persuasion, from rigidity to flexibility, from “reactivity” to “proactivity”, from “influence” to “interaction” between managers and those controlled. Today, fiscal authorities are encouraged to adhere to a «cooperative approach» in dealing with taxpayers, based on principles such as dialogue, mutual understanding, impartiality, reciprocity, transparency, compromise and flexible response. At the same time, law-abiding behavior should be encouraged in every possible way, and unlawful behavior should be subject to increased discouragement.The doctrine of flexible tax administration advocates the development of trust in the relationship between taxpayers and tax authorities, offering the latter a wide range of tools to ensure tax compliance, and not limited to control and sanctions. The main mission of the state is to encourage taxpayers to partner with fiscal authorities and to voluntary compliance.For any state, the most desirable situation is the voluntary fulfillment of tax obligations by all participants in tax interactions, which makes it possible to minimize the size of the tax gap. Both persuasion and coercion as methods of tax administration have their pros and cons. Therefore, the key to a successful tax administration strategy is not abandoning one method in favor of another, but combining them in a balanced manner so that both methods cumulatively complement each other.Conclusions.In order to effectively increase the level of tax compliance, it is necessary to use a comprehensive tax-legal, organizational and informational toolkit, including both tax enforcement measures demonstrating the tax administration's determination to ensure tax compliance on the part of tax violators, and measures of positive incentives and rewards oriented for service support of law-abiding and conscientious taxpayers.

Tax compliance in an EFD-enabled environment: Evidence from a developing economy

The focus of this study was to assess the contribution of Electronic Fiscal Devices (EFDs) to ensuring tax compliance among small business owners in the Arusha Region in Tanzania. The study was motivated by the fact that the government of Tanzania has invested effort and funds to ensure that revenue adequately supports development projects. Regardless of effort, there is continued reliance on external sources of funds to support development projects. This poses a question on how the introduction of EFDs would increase tax compliance and eventually impact the government income for development projects. The main objective of the study was to determine whether the rate of using EFDs, the level of transparency, fairness in tax procedures, and the perceived audit effectiveness affect the level of tax compliance. Data was analyzed using descriptive procedures, One Way ANOVA, Chi-Square, and ordinal regression. Findings of the study are as follows: First, fairness in tax procedures, the perceived level of transparency and the rate of EFD use had no impact on the level of tax compliance; second, business and EFD use experience, audit effectiveness, and the use of EFDs in tax audits have impacted tax compliance. The study recommends other government departments to consider adopting relevant technology in operational areas where transparency, fairness and compliance are required. The inclusion of other sectors not currently captured by EFD use will be a step in the right direction.

Tax Compliance and its Enforcement Instruments: Russian Approach

The absence of a tax compliance theory in the Russian doctrine predetermined the objectives of the study – the search for promising tools to achieve the willingness of taxpayers to comply with the tax legislation voluntarily, as well as determining the place of coercive measures against taxpayers in order to ensure tax compliance in the Russian Federation. The work is based on the complex application of a number of general and special research methods (structural and functional analysis, comparative legal, formal-logical, system-structural methods). The information base of the research is represented by domestic legal acts and judicial practice, official data of the Federal Tax Service of Russia, scientific works of both Russian and foreign authors. The study’s main outcome is to validate the conclusion that tax administration (in order to ensure tax compliance) must combine not only the tools of coercive influence (tax audits, horizontal tax monitoring, anti-tax avoidance measures aimed at tackling aggressive tax planning) but also stimulating tools: interaction between tax payers and tax authorities in the form of information exchange, sending recommendations and proposals to the taxpayer on independent clarification of the tax base and tax obligations

The influence of Hofstede’s cultural dimension on tax compliance behaviour of tax practitioners

PurposeThe purpose of this paper is to determine whether Hofstede’s cultural dimensions have a significant relationship with ethical decision-making among tax practitioners while performing their duties in ensuring tax compliance among taxpayers.Design/methodology/approachA structured questionnaire was used to collect data from tax practitioners in the state of Terengganu, Malaysia. Two hundred questionnaires were distributed via Google Forms and email to tax practitioners who were selected from the Inland Revenue Board of Malaysia website using a mixture of systematic random and snowball sampling approaches. The Statistical Package for Social Sciences software program was used to analyse the collected data.FindingsThe results show that power distance (PD), individualism (IND) and uncertainty avoidance (UAV) have a significant relationship with ethical decision-making, whereas masculinity (MAS) has no significant relationship with ethical decision-making among tax practitioners while carrying out their duties. The positive relationship of PD and of IND with decision-making behaviour indicates that ethical decision-making is highly practised in a low PD and low IND culture rather than in a high PD and high IND culture. In contrast, UAV shows a negative beta sign, which indicates that tax practitioners tend to practise ethical decision-making in a high UAV culture.Originality/valueThis study fills a gap in the literature in regard to the influence of culture on tax compliance particularly among tax practitioners in Malaysia. The study shows how culture is related to the decision-making practices of tax practitioners while performing their role as an intermediary between their clients and the government. It is worthwhile to examine the decision-making of tax practitioners because the results of such an examination not only provide some insights into the professional practices of accountants that will be of interest to the relevant authorities such as the Malaysian Institute of Accountants, they also offer some information that will be of assistance to higher learning institutions in formulating accounting programmes to produce the future generation of accountants.

A Decision Support System for Corporate Tax Arrears Prediction

This paper proposes a decision support system to predict corporate tax arrears by using tax arrears in the preceding 12 months. Despite the economic importance of ensuring tax compliance, studies on predicting corporate tax arrears have so far been scarce and with modest accuracies. Four machine learning methods (decision tree, random forest, k-nearest neighbors and multilayer perceptron) were used for building models with monthly tax arrears and different variables constructed from them. Data consisted of tax arrears of all Estonian SMEs from 2011 to 2018, totaling over two million firm-month observations. The best performing decision support system, yielding 95.3% accuracy, was a hybrid based on the random forest method for observations with previous tax arrears in at least two months and a logical rule for the rest of the observations.

Концептуальні підходи до розроблення стратегії розвитку податкової системи України

Tax strategy as a general plan for reforming the tax system in the medium term, defining ways to achieve goals and objectives of the reform, introduces elements of predictability in the activities of economic agents, facilitates its planning, protects against chaotic, unreasoned changes in tax legislation, provides to changes of coherence, sequence, transparency. Therefore, its development and implementation is an important element of strategic public administration, which has not been used in Ukraine in recent years. Given this, the purpose of the article is to reveal the conceptual foundations of the formation of a strategy for the development of the tax system of Ukraine. The article substantiates the advantages of subordinating the development of the tax system of Ukraine in the medium term to ensuring smart, sustainable and inclusive economic growth. Five strategic priorities have been identified for the implementation of tax reform aimed at achieving this goal: reducing income and wealth inequality; increasing the fairness of taxation; stimulating investment in innovation and social capital; greening of the tax system; increasing its fiscal efficiency and productivity by improving tax administration, increasing the capacity of tax authorities. For each of the priorities, possible measures and steps necessary for their implementation are proposed. The necessity of determining the expected results and performance indicators, on the basis of which the strategy implementation will be monitored and evaluated, has been substantiated. It has been established that the development of a strategy should begin with defining a system of restrictions generated by global, macroeconomic, institutional, political, and behavioral factors, and choosing a scenario for reforming the tax system. The general approaches to formation of structure of strategy, its purpose and strategic priorities are defined (should correspond to interests of all society, providing the decision of the important problems connected with inequality and poverty, safety of an environment and preservation of its diversity, creation of equal conditions of competition for business entities), requirements for the choice of measures and steps to ensure their implementation (compliance with the goal and priorities; realism; mutual coherence, consistency; systemacity (combination of changes in the structure of taxes and their elements with changes in tax administration and activities of institutions that ensure tax compliance). The necessity of introduction of monitoring and annual evaluation the effectiveness of the strategy implementation, as well as publication of reports on its implementation is substantiated.

Firm Size and Tax Saving Behaviour of Listed Companies in Nigeria

In this paper has been investigated tax savings behaviour of firms in Nigeria with the objective of finding out how it affects firm size. The ex-post facto research design was employed, and secondary data obtained from the annual reports of firms listed on the Nigeria Stock Exchange was used. Descriptive statistics and panel data regression tests were conducted. The data were further subjected to unit root test to establish the stationarity of the data. The result revealed that interest tax savings behaviour and depreciation savings behaviour have negative but significant relationship with firm size while effective tax rate has negative and insignificant relationship with firm size. The study concluded that the lower the firm size the higher the tax savings behaviour and vice versa of quoted companies in Nigeria. The paper recommended that tax regulatory authorities should focus their searchlight on tax aggressiveness of small sized companies as a strategy to reduce tax evasion while encouraging appropriate tax savings strategies to ensure tax compliance.

Information Reporting and Tax Compliance

Ensuring tax compliance is an enduring problem for governments in all countries. In this paper, we examine the role of information reporting in increasing tax compliance. We first discuss the practice of information reporting in the US, including a recent IRS initiative that implemented information reporting for income received through debit and credit cards via the new Form 1099-K. We then review the literature on the compliance effects of information reporting. Finally, we report some new evidence that indicates that Form 1099-K information reporting had significant--but heterogeneous--impacts on compliance rates of different types of business reporting.

Tax knowledge for the digital economy

Orientation: Because of the digital economy, taxpayers have access to new income streams. These virtual transactions have taxation consequences, and therefore taxpayers need specialised taxation knowledge to understand their tax obligations and act in a tax compliant manner.Research purpose: The aim of this article was to identify the unique tax knowledge requirements for individuals functioning in the digital economy by systematically reviewing literature on the tax challenges arising from this new economy. Applying a conceptual framework of tax knowledge, these knowledge requirements were categorised as either general, procedural or legal. By identifying these requirements, it was possible to point out the risks within these categories that may cause obstacles to individuals to act fully tax compliant.Motivation for the study: Understanding the different knowledge requirements of taxpayers may assist tax authorities to identify the tax compliance risks of these taxpayers in their capacity as individuals functioning in the digital economy.Research approach/design and method: A qualitative approach was used in the study through a thematic search of appropriate literature such as articles, reports, blogs and media releases. These documents were systematically reviewed to identify the knowledge requirements for individual taxpayers functioning in the digital economy.Main findings: The findings suggest that there are specific tax knowledge requirements in different areas that must be in place to ensure tax compliance in the digital economy. Any shortcomings in these areas of knowledge create the risk of non-compliance for individuals functioning in the digital economy.Practical/managerial implications: Taxpayers and tax authorities alike should take note of the risk areas identified in each area of knowledge (general, procedural and legal) and devise strategies to deal with taxation issues arising from transactions in the digital economy.Contribution/value-add: This study applied a tax knowledge framework and identified the general, procedural and legal tax knowledge requirements of individuals functioning in the digital economy. The study also pointed out associated compliance risks, which may assist tax authorities to target strategies for improving taxpayer knowledge in these three areas.