Tax Administration and the Small Taxpayer

Small taxpayers should pay their appropriate revenue share while their compliance costs should be reduced. This assumes importance as restructuring in emerging markets has meant rapid growth in services through self-employed small entrepreneurs, who have good revenue potential. Administrative facilitators such as a single tax covering income tax, VAT, and social security tax, at a reduced rate, do not lower tax evasion. They increase vertical and horizontal inequity, and lead to adverse resource allocation. A strategy is needed, extending modernization achieved in large taxpayer units (LTUs) to small taxpayers, including rationalization of collection and reporting of revenue data for policy formulation.Tax administration;Services sector;tax evasion, tax structure, tax system, tax administrations, taxation, tax policy, large taxpayer units, taxpayer units, tax avoidance, tax collection, tax compliance, large taxpayers, tax revenue, tax return, tax simplification, vat revenue, tax compliance costs, tax contribution, tax payment, tax administration measures, tax collections, tax credit, costs of taxation, fiscal affairs, vat structure, tax structures, revenue collection, tax income, fiscal affairs department, taxpayer groups, tax base, tax treatment, business income tax, input tax credit, tax administrators, income taxes, tax deduction, individual income tax, vat system, tax potential, tax rates, tax enforcement, vat net, presumptive taxation, direct taxes, tax returns, direct tax, optimal taxation, effect of taxation, consumption tax, potential taxpayers, vat rate, national tax association, progressive tax, administrative costs of taxation, taxable income, persistent fiscal deficits, tax officials, tax preferences, fiscal documentation, fiscal deficits, tax purposes, tax policy design, tax liabilities, tax burden, tax arrangements, tax collector