ABSTRACT

A survey was conducted of 558 accountants who were consulted on the hours consumed in different activities related to national and provincial taxes. Absolute hourly requirements grow with firm size, ranging from a median of 45 monthly hours for micro-enterprises to 163 monthly hours for large ones. The relative compliance costs (routine hours divided by the total number of hours worked in the company) exhibit strong economies of scale, disproportionately affecting firms with fewer employees. More hours are dedicated to auxiliary tasks such as managing withholdings or complying with additional reporting requirements than to preparing and filing the tax returns themselves. Provincial taxation is shown to be less efficient than national taxation in terms of indirect costs, especially as the firm size increases. Failures in tax administration websites and constant regulatory changes are some of the biggest sources of wasted time for the taxpayers.

Keywords:

Taxation, tax compliance costs, tax administration, tax policy