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A survey on tax compliance costs of Flemish SMEs: Magnitude and determinants

Author

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  • B. SCHOONJANS
  • P. VAN CAUWENBERGE
  • C. REEKMANS
  • G. SIMOENS

Abstract

This study presents survey evidence on the magnitude and determinants of tax compliance costs in Flemish small and medium-sized enterprises (SMEs). Data were obtained from an internet questionnaire among members of a professional network of Flemish entrepreneurs, called VOKA. Analyzing a sample of 151 Flemish SMEs, we find that the tax compliance costs – exceeding over seven percent of gross added value – are relatively high. VAT, labor taxes and corporate taxes are the main components of tax compliance costs. In addition, our evidence confirms the regressivity hypothesis, according to which smaller companies face relatively higher compliance costs. Furthermore, industry, age and the proportion of blue-collar workers prove to be determining factors of relative compliance costs. Our study concludes by formulating a number of policy recommendations that might contribute to lower compliance costs.

Suggested Citation

  • B. Schoonjans & P. Van Cauwenberge & C. Reekmans & G. Simoens, 2011. "A survey on tax compliance costs of Flemish SMEs: Magnitude and determinants," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/707, Ghent University, Faculty of Economics and Business Administration.
    • Handle: RePEc:rug:rugwps:11/707
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    Cited by:

    1. Deogratius Mahangila & Wineaster Anderson, 2017. "Tax Administrative Burdens in the Tourism Sector in Zanzibar: Stakeholders’ Perspectives," SAGE Open, , vol. 7(4), pages 21582440177, October.
    2. Sofie De Schoenmaker & Philippe Van Cauwenberge & Heidi Vander Bauwhede, 2014. "Effects of local fiscal policy on firm profitability," The Service Industries Journal, Taylor & Francis Journals, vol. 34(16), pages 1289-1306, December.
    3. Philippe Van Cauwenberge & Peter Beyne & Heidi Vander Bauwhede, 2016. "An empirical investigation of the influence of municipal fiscal policy on firm growth," Environment and Planning C, , vol. 34(8), pages 1825-1842, December.
    4. Kay Blaufus & Franziska Hoffmann, 2020. "The effect of simplified cash accounting on tax and financial accounting compliance costs," Journal of Business Economics, Springer, vol. 90(2), pages 173-205, March.
    5. Robert Blackburn & David Smallbone, 2011. "Policy Support for SMEs," Environment and Planning C, , vol. 29(4), pages 571-576, August.

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