ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

The Effects of Sanction and Reward of Confirmed Compliant Tax Reporting System on the Recognition of Incorporation

  • Lim, Che Chul Gachon University Graduate School

Asian Tax Journal Vol. 16 No. 5 (2015), pp. 285-320

Abstract

The purposes of this study are to perform researches on if sanctions by the system inflict any effects on a sole-proprietorship’s recognition of conversion to a corporation. And to study on whether reward from the system makes any effects on the recognition of conversion to a corporation. We collected in total of 285 forms out of 400 distributed and 11 of those collected were removed as they were found to be inappropriate as they showed lack of inconsistency thus used in total of 274 forms for this study. For method of analysis, we performed frequency analysis and descriptive analysis in order to analyze composition of samples and characteristics of variables, reliability analysis for collected survey forms, Cronbach's alpha verification and factor analysis for validity analysis, and performed multiple regression analysis and Sobel test for hypothesis verification. The results of this study are as followings: First, it was indicated that both reward and sanction on taxpayers affect to recognition of conversion to a corporation. However, unlikely to our expectations, reward to taxpayers inflicted positive effects on the recognition. Second, it was indicated that whether to give reward or to impose sanction to taxpayers was caused by amount of tax paid and it affected to the recognition. Third, it was indicated that both reward and sanction to taxpayers were caused by cost spent to costs spent on cooperation to taxation resulting no effects to the recognition and it was confirmed that both reward and sanction to taxpayers directly affected the recognition.

Keywords

  • confirmed compliant tax reporting system
  • sanction and reward
  • recognition of incorporation

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