Tax Literacy of Australian Small Businesses

Small businesses are a critical component of economies, although they face a myriad of issues, including their literacy in relation to a number of key business issues. In recent years tax literacy has been argued as an important part of financial literacy. Research has demonstrated that a person’s tax literacy is likely to be greater when they are self-employed and operate their own businesses. However, whether this increased tax literacy is sufficient to address the labyrinth of issues faced when running a business is questionable. This article reports further evidence about the tax literacy of Australians who have conducted a business in relation to GST, deductions and their compliance attitude. These findings can build the foundation for future work to explore how tax literacy is an important component of financial literacy for small businesses.

Keywords: tax literacy, financial literacy, Australia, small business, compliance, deterrence, gst, cash flow

JEL Classification: K34, H25, I22

Suggested Citation: Suggested Citation

Freudenberg, Brett and Chardon, Toni and Brimble, Mark and Belle Isle, Melissa, Tax Literacy of Australian Small Businesses (December 18, 2017). 18(2) Journal of Australian Taxation 21-61, 2017, Available at SSRN: https://ssrn.com/abstract=3090125