Open AccessA Critical Review of the Characteristics of Presumptive Tax Systems in Developing Countries
Author(s) -
Munyaradzi Duve,
Danie Schutte
Publication year - 2021
Publication title -
theory, methodology, practice
Language(s) - English
Resource type - Journals
eISSN - 2415-9883
pISSN - 1589-3413
DOI - 10.18096/tmp.2021.03.03
Subject(s) - business , developing country , public economics , compliance (psychology) , key (lock) , economics , computer science , economic growth , psychology , social psychology , computer security
This paper considers the effect of the presumptive tax system characteristics on the tax compliance behaviour of small businesses in developing countries. Since the concept of presumptive taxation involves several features influencing the formalisation of small businesses, this paper seeks to survey three key areas of literature: targeted taxpayers, thresholds and timeframe. This paper differs fundamentally from previous studies in that it analyses presumptive tax system characteristics. A descriptive review approach was followed in evaluating the empirical literature on presumptive tax system characteristics. A content analysis was then performed on literature about categories and subcategories provided in the classification framework. The review highlights similarities and conflicting evidence of presumptive tax system characteristics in transforming the compliance behaviour of small businesses. It was concluded that the blended use of information technology and existing presumptive tax systems can facilitate the movement of small businesses from the informal to the formal sector.