Small and medium enterprises (SMEs) play a significant role in the economic deve- lopment of both advanced and developing countries. Some earlier research showed that taxation and compliance costs have a significant effect on economic growth, development and performance of the business sector. For this reason, our research focuses on tax compliance costs imposed on the SMEs in Bosnia and Herzegovina (B&H), which is a transition and post-conflict country with a complex tax system structure. This complexity is particularly highlighted in the direct taxation system, hence the focus of this research is on corporate income tax (CIT) compliance costs. Our methodology is based on simulation of tax compliance costs between different entities in B&H - Federation of B&H (FB&H) and the Republika Srpska (RS), as well as measuring the effective tax burden for SMEs in B&H and the region. Our simulation of the CIT return of a company „X “in line with the entity law suggests that the effective tax burden is higher in RS than in FB&H entity. This is further confirmed with the effective tax rate formula applied in the second part of the rese- arch using data from the AMADEUS database. This result has an important policy implication for the fiscal authorities in B&H, as very often public discourse goes in the opposite direction to our finding.
Evans C. Studying the studies: An overview of recent research into taxation operating costs. *E-journal of Tax Research. 2003;1:64–92.
2.
Wallschutzky I, Gibson B. Small business cost of tax compliance. *Australian Tax Forum. 1993;10*(4:511–43.
3.
Vaillancourt F. The administrative compliance costs of the personal income tax and payroll tax system in Canada. 1986.
4.
Shekidele C. Measuring the compliance costs of taxation excise duties 1995-96. *The African Journal of Finance and Management. 1999;7*(2:72–84.
5.
Sandford CT, Hasseldine J. The compliance costs of business taxes in New Zealand. 1992.
6.
Slemrod J, Venkatesh V. The income tax compliance cost of large and mid-size businesses. *Ross School of Business Paper. 2002;(914*).
7.
Sandford C. What it costs to pay tax: Policy issues. *Accountancy. 1989;113.
8.
*Paying Taxes 2014: The global picture, a comparison of tax systems in 189 economies worldwide*. 2014.
9.
Pierpoint P, Auburn T. The psychic costs of tax compliance: Nature and implications for policy. *Documentos de Trabajo de la Facultad de Ciencias Economicas y Empresariales. 1987;(17*).
10.
Pope J, Fayle R, Duncanson M. The compliance costs of personal income taxation in Australia. 1990.
11.
Pope J, Fayle R, Chen D. The compliance costs of public companies. Income taxation in Australia. 1991;
12.
Lammersen L. The measurement of effective tax rates: Common themes in business management and economics. 2002;
13.
Lazović-Pita L, Pita S. *Poreski izdaci u sistemu poreza na dobit - primjer Bosne i Hercegovine*. Institut za javne finansije Hrvatske.
14.
Klun M. Compliance costs for personal income tax in a transition country: The case of Slovenia. *Fiscal Studies. 2004;25*(1:93–104.
15.
Allers M. *Administrative and compliance costs of taxation and public transfers in the Netherlands*. 1994.
16.
Evans C, Ritchie K, Tran-Nam B, Walpole M. *A report into the incremental costs of taxpayer compliance*. 1997.
17.
Commission E. *SME taxation in Europe - An empirical study of applied CIT for SMEs compared to large enterprises*. 2015.
18.
Diaz C, Delgado M. The compliance costs of personal income tax in Spain. In: *Taxation compliance costs measurement and policy*. 1995. p. 1–15.
19.
Džafić Z, Zahirović S, Okičić J, Kozaric A. Internal and external obstacles to the development of SMEs in Bosnia and Herzegovina. *Croatian Economic Survey. 2011;13*(1:143–71.
20.
Collard D, Green S, Godwin M, Maskell L. The tax compliance costs for employers of PAYE and national insurance in 1995-96. *London. 1998;1.
21.
Chattopadhyay S, Das-Gupta A. The compliance costs of the personal income tax and its determinants. 2002.
22.
Čaršimamović N. Efektivno opterećenje poreza na dobit preduzeća u Bosni i Hercegovini u poređenju sa drugim zemljama. In: *Direkcija za ekonomsko planiranje Vijeća Ministara B&H - DEP*. 2006.
23.
Blumenthal M, Slemrod J. The compliance cost of taxing foreign-source income: Its magnitude, determinants, and policy implications. *International Tax and Public Finance. 1995;2:37–53.
24.
Blažić H, Klun M. Tax compliance costs for companies in Slovenia and Croatia. *Finanzarchiv. 2005;61*(3:418–738.
25.
Blažić H. Compliance costs of taxation in a transition country: The example of Croatia. In: *National Tax Association Proceedings, 97th Annual Conference on Taxation*. 2005.
26.
Bertolucci A. *The compliance costs of taxation in Brazil: A survey of costs in Brazilian Public Companies*. 2002.
27.
Anderson DR, Sweeney DJ, Williams TA. 2016.
Citation
Copyright
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
The statements, opinions and data contained in the journal are solely those of the individual authors and contributors and not of the publisher and the editor(s). We stay neutral with regard to jurisdictional claims in published maps and institutional affiliations.
