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Tax evasion by Small and Micro Sized Enterprises (SMEs) in Uzbekistan

Erkaboev, Alisher


Alisher Erkaboev


Waymond Rodgers

Ros Haniffa


The importance of understanding tax compliance and non-compliance behaviour is important to any governments and tax authorities (HMRC, 2009). Insight into the decision-making behaviour of taxpayers is essential to researchers in assisting governments as they struggle to meet new challenges of economy while trying to balance budget deficits and infrastructure demands. This study examines the influence of tax evasion factors on Small and Micro-sized Enterprises (SME) owners’ tax evasion decision making behaviour in Uzbekistan. This study examined some selected salient factors of SME owners’ tax evasion behaviour by using Ethical Process Thinking Model in an attempt to offer both researchers and policy makers a more defined understanding.

The study begins by identifying key tax compliance and non-compliance factors listed in literature and organising them into a theoretically based model. Jackson and Milliron (1986) and Richardson and Sawyer (2001) categorise fourteen salient factors of tax compliance and non-compliance into four groups namely, noncompliance opportunities, attitudes and perceptions, tax system structure and demographics. Six key factors out of fourteen are then integrated into an Ethical Process Thinking Model allowing the researcher to examine two pathways of this model. The Ethical Process Thinking Model (Rodgers, 2009) depicts various stages and pathways that can influence a taxpayers’ compliance/noncompliance decision process. The Ethical Process Thinking Model asserts that four major processing stages of perception, available information, judgement and decision choice with their total effects will provide meaningful relationships of the causes of decisions (Rodgers & Cago, 2001; Rodgers, 2009; Rodgers et al., 2014). This new approach to the tax evasion decision making process may provide a more complete picture of tax evasion behaviour of SME owners.

In order to understand the tax compliance behaviour of SME owners in this study, a mixed-method approach, combining surveys and semi-structured interviews, was used. Quantitative data was analysed by SmartPLS software version 3.0 using Structural Equation Modelling (SEM) technique. Transcribing, coding and finding relevant themes were used to analyse the qualitative data.

The findings of this study show that taxpayers’ perceptual and informational factors had stronger influence on SME owners’ tax evasion decision behaviour. Amongst perceptual factors, personal financial difficulty and perception of corruption were the most influential factors to the tax evasion behaviour of SME owners. Complexity of tax laws and compliance costs from informational factors were the highest influential factors on SME owners’ tax evasion decision behaviour. The results from the interviews indicate that financial motivation was not a significant factor in SME owners’ tax evasion decision behaviour. Moreover, the findings suggest that there is positive relationship between tax audits and SME owners’ tax evasion decision behaviour. The interview findings further clarified that SME owners view tax audits as extra compliance costs not as audit checks.

The findings contribute to the theoretical and practical aspects of understanding the tax evasion behaviour of SME owners in Uzbekistan. The findings from this study may be useful for tax authorities and regulators to combat tax evasion.


Erkaboev, A. (2016). Tax evasion by Small and Micro Sized Enterprises (SMEs) in Uzbekistan. (Thesis). University of Hull. Retrieved from

Thesis Type Thesis
Deposit Date Feb 21, 2022
Publicly Available Date Feb 24, 2023
Keywords Business
Public URL
Additional Information Business School, The University of Hull
Award Date Oct 1, 2016


Thesis (3 Mb)

Copyright Statement
© 2016 Erkaboev, Alisher. All rights reserved. No part of this publication may be reproduced without the written permission of the copyright holder.

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