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

Author

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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)

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.

Suggested Citation

  • Neba Bhalla & Rakesh Kumar Sharma & Inderjit Kaur, 2022. "Effect of Tax Knowledge and Technological Shift in Tax System on Business Performance: A PLS-SEM Analysis," Sustainability, MDPI, vol. 14(16), pages 1-18, August.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:16:p:10217-:d:890438
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    Cited by:

    1. Neba Bhalla & Rakesh Kumar Sharma & Inderjit Kaur, 2023. "Effect of Goods and Service Tax System on Business Performance of Micro, Small and Medium Enterprises," SAGE Open, , vol. 13(2), pages 21582440231, June.

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