Effect of Tax Knowledge and Technological Shift in Tax System on Business Performance: A PLS-SEM Analysis

Neba Bhalla (), Rakesh Kumar Sharma and Inderjit Kaur
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Neba Bhalla: School of Humanities and Social Sciences, Thapar Institute of Engineering and Technology, Bhadson Road, Patiala 147004, Punjab, India
Rakesh Kumar Sharma: School of Humanities and Social Sciences, Thapar Institute of Engineering and Technology, Bhadson Road, Patiala 147004, Punjab, India
Inderjit Kaur: LM Thapar School of Management, Dera Bassi Campus, Thapar Institute of Engineering and Technology, Chandigarh 140507, Punjab, India

Sustainability, 2022, vol. 14, issue 16, 1-18

Abstract: Taxes are imperative for the economy and businesses for better growth and development. Understanding the taxes and having the right approach towards them can make a vast difference between the success and failure of businesses. Therefore, the present paper aims to examine the impact of tax knowledge on business performance. The study is based on the primary survey of 450 registered Indian MSMEs. The empirical findings from the Partial Least Square Structure Equation Modeling highlight that tax knowledge enhanced operational efficiency and prevented firms from tax fraud. In addition, the technological advancement in the tax system and its knowledge led to proper tax administration and governance by firms which enhanced their productivity. The results may prove beneficial for policymakers, governments, and businesses because in-depth tax knowledge would lead to timely tax compliance and reduced tax evasion, avoidance, and scams.

Keywords: small business; technology transformation; business performance; tax knowledge and awareness; GST; PLS-SEM; MSME; India (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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