An Econometric Perspective on Accounting and Taxation in Small and Medium-Sized Enterprises in the Autonomous Region of Madeira
Abstract
This research examines the accounting and tax situation of Small and Medium Enterprises (SMEs) in the Autonomous Region of Madeira, considering the interaction between internal management factors and the regional tax context. Using a quantitative approach with primary and secondary data, econometric models — encompassing multiple linear regression, 2SLS, and regression discontinuity analysis — were applied to assess the impact of tax burden, regulatory complexity, and technological adoption on the financial performance and tax compliance of SMEs. The results indicate that structured accounting systems and qualified managers contribute to improved financial indicators and enhanced tax compliance. In contrast, the overlap of taxes and parafiscal charges increases administrative costs and hinders adjustment to seasonal variations in the local economy, especially in the tourism sector. The perception of tax fairness and the educational level of entrepreneurs have a positive influence on the adoption of digital platforms and voluntary compliance. The implementation of simplified and flexible tax regimes, aligned with economic seasonality, combined with training programs and continuous econometric monitoring mechanisms, is recommended. Strategies to strengthen competitiveness include facilitated access to incentives conditioned on reinvestment, inter-company cooperation, and the strategic use of accounting as a management tool. Future perspectives suggest expanding the analysis timeframe, refining variables, and incorporating advanced methodological approaches, intending to support public policies that promote the sustainability and growth of Madeira's SMEs.
References
Al Masyhari, A. K., Rachmadani, W. S., Priatnasari, Y., & Basrowi. (2024). Optimizing state revenue through government-driven supply chain efficiency and fair corporate taxation practices. Uncertain Supply Chain Management, 12, 659–668. https://doi.org/10.5267/j.uscm.2024.1.018 Basova, A. (2017). Accounting-analytical model of innovation-active business entities. Advances in Economics, Business and Management Research, 38, 40. Bruhn, M., & Loeprick, J. (2014). Small business tax policy, informality, and tax evasion: Evidence from georgia. Confidence, I. J., Olusayo, A. T., & Jonny, B. T. N. (2023). Effect of multiple taxation on performance of SMEs in bayelsa state, nigeria. Journal of Accounting and Financial Management, 9(4), 84. https://doi.org/10.56201/jafm.v9.no4.2023.pg84.100 Deyganto, K. O. (2022). The effect of tax incentives practices on the sustainability of micro, small and medium enterprises in ethiopia during the outbreak of corona virus pandemic. Journal of Innovation and Entrepreneurship, 11(8), 8. https://doi.org/10.1186/s13731- 022-00194-8 Drinkwater, S., Lashley, J., & Robinson, C. (2018). Barriers to enterprise development in the caribbean. Entrepreneurship & Regional Development. https://doi.org/10.1080/08985626.2018.1515821 Ellawule, A., Bashir, Y. M., Dalhat, B. S., & Suleiman, N. (2024). Effect of tax incentives on MSMEs’ tax compliance in nigeria. Journal of Business Management and Accounting, 14(2), 339–365. https://doi.org/10.32890/jbma2024.14.2.6 G., E. O., & David, A. (2024). Multiple taxation and performance of selected SMEs in edo central, edo state, nigeria. African Journal of Management and Business Research, 17(1), https://doi.org/10.62154/ajmbr.2024.017.010500 Gale, W., & Brown, S. (2013). Small business, innovation, and tax policy: A review. https://mpra.ub.uni-muenchen.de/57384/ Gertler, M., & Hubbard, R. G. (1991). Corporate financial policy, taxation, and macroeconomic risk. Hranovskaya, I. (2021). The current state of development of small business taxation in ukraine. ??????? ?? ???????, 3, 114–114. https://doi.org/10.32840/1814-1161/2021-3-18 Karim, S. (2024). Impacts of taxation on small and medium enterprises in makeni city, northern province of sierra leone: A case study of ten SME’s in makeni city. Journal of Economics, Business, and Commerce, 1(1), 20–29. https://doi.org/10.69739/jebc.v1i1.48 Kong, X., Si, D.-K., Li, H., & Kong, D. (2021). Does access to credit reduce SMEs’ tax avoidance? Evidence from a regression discontinuity design. Financial Innovation, 7(18). https://doi.org/10.1186/s40854-021-00235-3 Kraus, K. M., & Kraus, N. M. (2025). Analysis of tax revenues to the budget and tax administration of digital business. ????????????, 2, 351–360. https://doi.org/10.32983/2222-4459-2025-2-351-360 Kusumawardhani, A., Laurianto, J. J., & Santoso, E. A. (2023). The impact of e-SPT, e-filing, e- billing, and taxpayer attitude toward tax compliance on individual taxpayers of micro, small, and medium business in surabaya. International Journal of Organizational Behavior and Policy, 2(1), 23–34. https://doi.org/10.9744/ijobp.2.1.23-34 Leonard, N. S. (2025). MULTIPLE TAXATION AND PARA-FISCALITY AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMES) IN SOUTH- AFRICA: CASE OF THE REPUBLIC OF CONGO. International Journal of Management, 16(1), 51–71. https://doi.org/10.34218/IJM\_16\_01\_005 Lubua, E. W. (2022). Implication of using electronic fiscal devices on audit effectiveness among small business owners of arusha – tanzania. The Pan–African Journal of Business Management, 6(2), 42. Martinez Campos, M., Aguilar Madeira, M. J., & Cagica Carvalho, L. (2023). Barriers to product innovation: An empirical study in portuguese services SME. Economics and Sociology, 16(4), 230–243. https://doi.org/10.14254/2071-789X.2023/16-4/11 Matarirano, O., Chiloane-Tsoka, G. E., & Makina, D. (2019). Tax compliance costs and small business performance: Evidence from the south african construction industry. South African Journal of Business Management, 50(1), 1–9. https://doi.org/10.4102/sajbm.v50i1.336 Mbazulike, J. U., Ukairo, M., & Umar, B. (2023). Effect of multiple taxation on the survival of small and medium scale enterprises (SMEs) in katsina state, nigeria. EPRA International Journal of Economics, Business and Management Studies (EBMS), 10(6). https://doi.org/10.36713/epra13677 Mubanga, E. (2022). Evaluating the relationship between taxation and economic growth in zambia. International Journal of Economics and Finance, 14(6), https://doi.org/10.5539/ijef.v14n6p22 Mukhlis, I., Utomo, S. H., & Soesetio, Y. (2015). The role of taxation education on taxation knowledge and its effect on tax fairness as well as tax compliance on handicraft SMEs sectors in indonesia. International Journal of Financial Research, 6(4), 161. https://doi.org/10.5430/ijfr.v6n4p161 Rwakihembo, J., Oceng, P., Aryatwijuka, W., & Baguma Kule, J. Attitude towards electronic tax system and value -added tax compliance, the mediating effect of adoption of the electronic tax system among small and medium enterprises (SMEs) in fort portal city, western uganda. S., S. B., & Mayya, S. (2022). An analysis of pan-india financial intermediation accomplished through the implementation of pradhan mantri mudra yojana (PMMY) - literature review. International Journal of Case Studies in Business, IT, and Education (IJCSBE), 6(2), 141–173. https://doi.org/10.5281/zenodo.7033681 Siahaan, F., Amberger, H., & Sureth, C. (2023). Turnover-based corporate income taxation and corporate risk-taking. In arqus Discussion Paper (281). https://hdl.handle.net/10419/285364 Silajdzic, S., & Mehic, E. (2022). How effective is tax policy in attracting foreign direct investments in transition countries? Central European Business Review, 11(1), 19. https://doi.org/10.18267/j.cebr.274 Thaha, A. R., Antoro, A. F. S., & Muhtarom. (2023). Analytical review of tax compliance studies in the SMEs sector: A bibliometric approach. 9(3), https://doi.org/10.15826/jtr.2023.9.3.14 Wulandari, W., Teron, F. C. K., Agustina, D., & Rofiyanti, E. (2022). Evaluation of the implementation of tax incentive policy for small and medium enterprises affected by the covid-19 pandemic at the tax service office pratama koja utara jakarta. Ilomata International Journal of Tax and Accounting, 3(2), 215–225. https://doi.org/10.52728/ijtc.v3i2.476 Zemtsov, S., Tsareva, Y., Barinova, V. A., Belitski, M., & Krasnoselskikh, A. N. (2022). Small business in russia: Institutions, market potential, taxes and digitalization. Post-Communist Economies, 34(8), 1029–1053. https://doi.org/10.1080/14631377.2022.2108244
