A survey of tax compliance costs of Flemish SMEs: magnitude and determinants

This study presents survey evidence on the magnitude and determinants of tax compliance costs in Flemish small and medium-sized enterprises (SMEs). Data were obtained from an Internet questionnaire among members of a professional network of Flemish entrepreneurs, called VOKA. Analyzing a sample of 151 Flemish SMEs, we find that the tax compliance costs exceeding over 7% of gross added value are relatively high. Value-added tax, labor taxes, and corporate taxes are the main components of tax compliance costs. In addition, our evidence confirms the regressivity hypothesis, according to which smaller companies face relatively higher compliance costs. Furthermore, industry, age, and the proportion of blue-collar workers prove to be determining factors of relative compliance costs. Our study concludes by formulating a number of policy recommendations that might contribute to lower compliance costs

An evaluation of public spending: the effectiveness of a government-supported networking program in Flanders

Most countries of the world have developed a wide array of government assistance programs for companies. However, it is only recently that researchers have started to evaluate the benefits of these programs empirically. This paper contributes to this emerging area of research by examining whether PLATO-a networking and training program sponsored by the Flemish government-increased the labor productivity of the participating companies. Our regression analysis of a panel dataset of Flemish small and medium-sized enterprises that existed between 1996 and 2008 confirms that PLATO participation indeed increases labor productivity. In addition, from a qualitative analysis of the PLATO program we infer some of its success factors, which could inform governments about how to design company support programs

Formal business networking and SME growth

This paper provides new empirical evidence on the impact of formal business networking on small and medium-sized enterprise (SME) growth. Using a large, unbalanced panel data set of Flemish SMEs over the period 1992-2008, we examine whether participation in a government-supported program aimed at providing small business managers with structured formal networking contacts is associated with SME growth. Our results suggest that formal business networking is significantly positively correlated with net asset and added value growth

Knowledge networking and growth in service firms

This paper empirically assesses whether knowledge networking affects the growth of small service firms. More specifically, using a large, unbalanced panel data set for the period 1992-2009, it investigates whether participation in a knowledge network called PLATO is positively related to service firm growth. The results show that knowledge networking has a highly significant positive effect on the net asset and added value growth of service firms. Furthermore, it is demonstrated that the positive effect of knowledge networking on firm growth is significantly larger for service firms than for manufacturing firms, indicating that industry drives networking success

A survey of tax compliance costs of Flemish SMEs: magnitude and determinants

This study presents survey evidence on the magnitude and determinants of tax compliance costs in Flemish small and medium-sized enterprises (SMEs). Data were obtained from an Internet questionnaire among members of a professional network of Flemish entrepreneurs, called VOKA. Analyzing a sample of 151 Flemish SMEs, we find that the tax compliance costs—exceeding over 7% of gross added value—are relatively high. Value-added tax, labor taxes, and corporate taxes are the main components of tax compliance costs. In addition, our evidence confirms the regressivity hypothesis, according to which smaller companies face relatively higher compliance costs. Furthermore, industry, age, and the proportion of blue-collar workers prove to be determining factors of relative compliance costs. Our study concludes by formulating a number of policy recommendations that might contribute to lower compliance costs.