Analysis of tax evasion techniques in small and medium sized companies in the industrial sector

Abstract

Tax evasion is an issue that impacts tax systems. For this reason, the objective of this study is to analyse the main tax evasion practices of SMEs in Tungurahua and their impact on national tax collection. Through descriptive research, data was collected through surveys of accounting professionals, showing that the high tax burden and deficiencies in tax inspection are factors that encourage these practices. SMEs in Tungurahua resort to various tactics such as false invoicing, concealment of income and the use of shell companies, which decreases the tax base and significantly reduces tax collection. It is concluded that the lack of awareness of tax citizenship on the part of taxpayers and the lack of business formalisation, among other factors, encourage evasion practices that limit economic development and affect competitiveness.