Factors affecting to accounting for income tax in SMEs - a case study of a rural province with flourishing SMEs in Vietnam

Abstract

 Small and medium enterprises (SMEs) play an important role in economic development and job creation, but the effectiveness of accounting for tax and tax management in these entities is still limited. Recently, just some research, which surveys maily on SME in big cities, dicsusses deeply into tax accounting in SMEs. This study will continue to explore this topic through examining the factors affecting corporate income tax accounting in SMEs in Ly Nhan, Ha Nam- a Northern Delta district with a flourishing SMEs thanks to advantages from traditional craft villages and favorable traffic conditions. Survey carried out among SMEs and tax officers demonstrates the effect of some main factors, including: Pressure from the desire to avoid tax of business owners; The inconsistency and unclearness in policies on corporate income tax as well as tax accounting, and the ineffectiveness of tax authorities’ consultation and propaganda about these policies. SMEs tend not to use outside consulting services, not yet pay enough attention to investment in information technology, while the understanding of regulations and tax regimes of the accounting staff is limited.