Tax System Obstacles to Business Operations in Transition Countries
DOI:
https://doi.org/10.33423/011t1w10Keywords:
management, tax administration, tax system obstacles, business operations, transition economies, Environment and Enterprise Performance Survey (BEEPS)Abstract
This study examines how tax system characteristics affect firm behavior in transition economies using panel data from the BEEPS survey. Generalized ordered probit models show that tax administration practices significantly influence firms’ perceptions of tax burdens. To address endogeneity, the analysis estimates unexplained tax obstacles using methods from happiness economics. Results reveal that firms previously reporting tax administration as an obstacle later spent more time on tax compliance, made slightly fewer payments, and experienced more frequent tax inspections. The findings offer insights into how evolving business conditions and tax practices shape firm operations over time.
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