TAX COMPLIANCE COSTS AND SMALL BUSINESS GROWTH: A STUDY OF INDIAN MICRO ENTERPRISES

Abstract

This review research paper aims to investigate the relationship between tax compliance costs and small business growth, specifically focusing on Indian micro-enterprises. The purpose is to understand how tax-related burdens impact the growth trajectory of these businesses. The paper is grounded in economic theories of taxation, small business growth models, and relevant literature on tax compliance costs. It also considers the regulatory environment and tax policies affecting micro-enterprises in India. A mixed-methods approach is employed, combining quantitative analysis of tax data and surveys with qualitative interviews of micro-enterprise owners and tax experts. This approach provides a comprehensive understanding of the challenges and opportunities related to tax compliance for small businesses. The findings reveal significant correlations between tax compliance costs and various aspects of small business growth, including profitability, investment decisions, and competitiveness. The study also identifies factors that influence tax compliance behavior among micro-enterprises. This research contributes to the academic discourse on tax compliance and small business development, offering insights for policymakers, tax authorities, and business owners to improve tax systems, reduce compliance burdens, and promote sustainable growth in the micro-enterprise sector. The findings also have practical implications for tax planning and management strategies for small businesses. The paper adds value by focusing specifically on Indian micro-enterprises, a segment often overlooked in tax compliance studies. It provides new perspectives on the relationship between tax burdens and business growth in a developing economy context, contributing to the literature on taxation and economic development.