Microfoundations of small business tax behaviour: a capability perspective

Martina Battisti, David Deakins

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Abstract

Small business tax behaviour has received surprisingly little attention. We argue that an organisational capability perspective using microfoundations will allow us to better understand the relationships between different drivers and dynamics of small business tax behaviour. This study draws on in-depth interviews with 42 small business owners that are matched with the firms’ factual tax compliance status. Using grounded theory, we build a framework that (a) identifies different microfoundations of small business capability to manage tax and (b) explains the dynamic nature of the relationship between organisational capability and compliance. Findings suggest that high capability does not necessarily translate into high tax compliance and this relationship is mediated by the owner-managers’ perceptions of taxation as well changes in the economic and regulatory environment.
Original languageEnglish
Pages (from-to)497-513
JournalBritish Journal of Management
Volume29
Issue number3
Early online date14 Sep 2017
DOIs
Publication statusPublished - Jul 2018

Keywords

  • tax
  • compliance
  • organisational capability
  • microfoundations
  • small business
  • New Zealand

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