This paper endeavours to investigate whether a complex tax system influences firms’ propensity toward tax evasion across countries. To achieve the objectives of this study, we utilised the World Bank Enterprise Survey and the World Bank’s Doing Business databases covering more than 46,000 companies from 83 countries. Our study revealed that the increased time required to pay taxes and higher total tax payments were associated with a greater extent and incidence of tax evasion among firms. The consistency of these benchmark regression results was proven through endogeneity analysis and several robustness tests. Furthermore, our heterogeneity analyses showed that the effect of tax complexity on firm tax evasion was more prominent in low- and lower-middle-income countries and also in the primary industry. These findings offer promising evidence for policymakers, particularly in low- and lower-middle-income countries where the majority of companies operate in the primary industry. Addressing the complexity of the tax system could potentially mitigate the adverse impact on tax evasion levels in these countries. Furthermore, our spatial analysis provides valuable insights, emphasising the potential impact of tax complexity in neighbouring countries and underscoring the necessity for policymakers in the home countries to strategise on harmonising and streamlining their tax systems.

Small and medium enterprises (SMEs) are known worldwide as tools for economic growth and development as they lead to job creation, improved living standards, sustainable development and poverty eradication. However, complicated risks in production, operation, management, and risk-based decision-making in business has troubled the sector. This study examines the moderating effect of financial inclusion on the relationship between insurance literacy, risk knowledge management, risk-taking propensity and economic sustainability of Nigerian SMEs. Data was collected from 370 SMEs registered with the Small and Medium-scale Enterprise Development Agency of Nigeria (SMEDAN) using self-administered questionnaires. The study employs structural equation modelling (SEM) using AMOS 26.0 software for analysis. The study used multi-group analysis to determine the group in which the effect of moderation is more pronounced. The SEM produced a variety of findings; the path coefficients in the model and the results of the hypothesis testing show that insurance literacy (IL) significantly affects economic sustainability (ES). Also, the path coefficient between risk knowledge management (RKM) and economic sustainability shows a positive and significant relation, indicating that risk management (RM) has a significant positive impact on ES. Finally, the results show that risk-taking propensity (RTP) significantly affects ES. The results of the moderation also revealed that financial inclusion moderates the relationship between IL, RM, RTP and ES. However, the multi-group analysis shows that the effect is more pronounced in the ABC group than the NABC group.