Analysis Of Determinants Of Firm Tax Compliance Cost

Tax compliance cost is an important component in the taxation cost. Reducing the taxpayers'compliance cost is meaningful to implement tax efficiency, defend the rights of the taxpayers and encourage the taxpayers to comply with the tax laws voluntarily. This study makes an empirical analysis on the influence factors of tax compliance cost based on the investigation data of enterprises in Shandong province, and then puts forward policy recommendations to reduce the tax compliance cost in order to further improve the taxpayers' compliance behavior.The thesis is organized as follows:Chapter 1 presents the background of the tax compliance cost research, structure of the thesis, innovation and unsolved issues of the thesis.Chapter 2 presents an overview of business compliance cost studies both at home and abroad. In the first part, this section describes previous research in foreign countries, including conception and computing formula of tax compliance cost, magnitude and influence factors of tax compliance cost. In the second part, this section describes previous research in China, including research on importance of tax compliance cost, research on measurement of tax compliance cost, research on influence factors of tax compliance cost. Lastly, based on the previous study, the writer shows the research orientation in the field of tax compliance cost.Chapter 3 presents theoretical analysis of tax compliance cost. At first, this section introduces the classification and indicators of tax compliance cost. Then this section describes tax system principles, tax system design and optimization on the basis of tax compliance cost. These theories indicate that the tax compliance cost is important to both the tax authority and tax system design.Chapter 4 presents analysis of influence factors of tax compliance cost.The influence factors include:tax system,tax environment,business characteristics.Chapter 5 presents empirical analysis of tax compliance cost. The determinants of tax compliance cost are tax system, tax environment and the firm characteristics. This section makes an empirical analysis on the influence factors of tax compliance cost and tax compliance benefit. The empirical result shows that the compliance cost is decreasing to scale, the determining factors of tax compliance cost are the type of industry, the direct and indirect tax burden imposed on the companies, whether the companies have tax agency. However, there is no evidence to prove that nature of business, the collection method of the corporate income tax, the way of the value added tax invoice certification, the frequency of the tax audit to the companies are significant to the tax compliance cost; The compliance benefit is increasing to scale, the enterprises get more benefits from the indirect tax than that of the direct tax.Chapter 6 presents the recommendations for the tax compliance cost reduction. The suggestions include improving direct taxation system, futher improving the tax service to the small businesses,optimizing taxation agency system,bridging the gap of the compliance benefit between the large and small businesses.The thesis innovations include:first, this study builds a tax complexity model on the basis of the tax compliance cost and analyzes the tax compliance cost difference among different companies in the same tax system by using the model; second, this study makes an empirical analysis on the influence factors of tax compliance cost and tax compliance benefit.Although the thesis makes theoretical and empirical analysis of the tax compliance cost, there are some points to improve:first, the empirical analysis needs more sample data by expanding the investigation scale; second, it is not comprehensive for tax compliance benefit only including cash benefit and individual tax deduction fees, therefore the empirical analysis of the tax compliance cost needs further improvement.