The Swedish Tax system : Effects on Competition and Compliance in the National Restaurant Industry

• Similar to the restaurant industry in other countries, the restaurant industry in Sweden struggles with legitimacy, since many companies devote themselves to the shadow economy or the grey economy. As a consequence restaurants are regarded to belong to the Hard-to-Tax (HTT) sector. Previous research indicates that a large shadow economy can lead to unfair market competition and consequently less development in the sector. Companies within the shadow economy, i.e. the companies that with different methods are trying to avoid paying some or all of the taxes due to the tax authority, can survive and prosper with lower margins. Complying companies, on the other hand, are severely affected by comparably high compliance costs. Ultimately the situation threatens to force serious firms out of business and inflict the tax paying morale in a wider perspective. This is a particularly serious issue in a country where tourism is perceived as an important part of the overall economic strategy. A proposition is that the competitive situation and design of tax system are determinants of this situation.This research project aims to analyse effects of the Swedish tax system on compliance cost and competition for the restaurant industry. A web-based survey with 535 restaurant owners has been carried out. The results indicate that law abiding companies have considerably higher costs related to administration and accounting. Furthermore the unfair competition affects the progress and development of the sector since time and costs associated with tax administration impacts on companies' possibilities to develop and grow.This study adds knowledge through giving insight to industry specific data on compliance cost and its perceived impacts on competition. This, we hope, contributes to a discussion on new, alternative tax systems such as presumptive tax systems.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Business Administration (hsv//eng)

Nyckelord

Business Studies

Företagsekonomi

Publikations- och innehållstyp

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