Tax Compliance Behavior of Micro-Multinational Enterprises (mMNEs)

ABSTRACT


Introduction
The post-industrial revolution brought several changes to human life.In the 21st Century, digital disruption made technology an inseparable tool across all sectors in the economy [1].As a result of technological transformation, the digital economy has emerged, and now it has become the economy itself [1 2, 3].
Today, technological advancement breeds smaller firms to venture into international businesses [2,4,5,6,7,8,9,10].These smaller firms, as micro-multinational, capture opportunities across borders [11,12].A micro-multinational (mMNE) is a firm from birth or soon thereafter controls and manages valueadded activities in more than one country [13].Dimitratos et al. [8] identified that mMNEs as smaller firms in international entrepreneurship engage in knowledge management businesses.OECD [1] claimed that micro-multinationals are used as a vehicle for artificially reducing taxable income or shifting the profits to a low or no-tax jurisdiction in which little or no economic activity is performed.It creates a need to study the impact on the economy and develop a more comprehensive set of rules to govern the tax compliance of digital business [14] in the different jurisdictions.In the literature, the tax compliance behavior of technopreneurs or micro-multinationals remains under-explored.Hence, this study aims to investigate factors that influence on tax compliance behavior of mMNEs.
The paper is organised as follows: after the introduction, we present the previous empirical findings of the tax compliance behavior of citizens and businesses.Then we discussed the methodological choice of the study and research strategy.Research findings and analysis are discussed thereafter.In the final section, we present the conclusion, future research direction, and study limitations.As exploratory research, the study's main objective is to explore the tax compliance behavior of Micro-multinational enterprises and, more specifically, to identify what factors influence their tax compliance behavior.

Literature Review
There is a growing number of studies in the literature to understand the tax compliance behavior of citizens and businesses under different disciplines.With the advancement of technology, knowledgebased entrepreneurial opportunities have emerged.Hence, knowledge-based businesses open doors for cross border transactions without getting attention to tax authorities.In the recent past, researchers attempted to understand the tax compliance behavior of entrepreneurs in the digital economy.
With the introduction of the modern tax system by Adam Smith in 1776, taxes were identified as a main fiscal tool used by the government to collect revenue in a capitalist economy.Nineteenth-century social scientists get the attention to study tax compliance behavior as a separate subject in the research domain.After the seminal article published by Allingham and Sandmo [15], researchers attempted to understand the tax compliance behavior of citizens and businesses in various disciplines [16].At the initial stage, scholars used the economic approach to understand tax compliance behavior.Later, they used a behavioral approach to study tax compliance behavior.Today, researchers use an integrated approach to understand the tax compliance behavior of citizens and businesses.
In order to analyses the most recent literature on tax compliance behavior of entrepreneurs, researchers employed a systematic literature review (SLR) approach [17] to be systematic, transparent and reliable findings [18,19,20] in a similar setting.The researchers reviewed only the articles published in the ranked journals in the literature search as they considered the validated knowledge in the tax compliance domain [21].Books, book chapters, reports and working papers were excluded from the review due to variability in the peer-review process and restricted availability to access [18,22,23].
In carrying out SLR, only the empirical-based papers published during 2011 to 2020 were selected from journals published in the Scopus, Web of Science, and ScienceDirect databases through the specific keywords, "Tax Compliance", "Tax Evasion", and "Tax Avoidance" [22].The initial search process found 234 papers.Abstract of all 234 papers read to ensure that those papers covered the tax compliance behavior of entrepreneurs.When the doubt arose in reading the abstract, the whole paper was read before being reviewed.This process found 163 papers focused on different topics and tax compliance as a peripheral area in the paper.Hence, those papers are eliminated from the review process.Only the balance 71 papers were considered for the literature review.

Economic Factors
The mixed-method research conducted by Nguyen et al. [23] found that audit probability and the severity of sanctions directly affect voluntary tax compliance.Gangl et al. [24] found a weak relationship with audit and level of tax compliance.They found that theoretically, a tax audit is highly effective in controlling the compliance behavior of companies even it cannot be achieved in reality.Mendoza, Wielhouwer, Kirchler [25] found the association between auditing level and tax compliance.Their results revealed that compliance increases up to a certain level of audit, and after that, compliance starts to decline.However, Atawodi & Ojeka [26] found that firms avoid taxes less when tax enforcement is perceived to be stronger.Muehlbacher et al. [27] argued that tax policy should go beyond deterrent measures focusing on building trust in taxpayers' minds about the tax system and tax administration.A survey conducted by Schoonjans et al. [28] found that compliance cost impact on compliance decisions of small and medium enterprises.Eichfelder & Kegels [29] found that compliance cost not only affects complying with tax obligation itself.They recommend implementing a costeffective tax system to avoid the regressive effect of compliance cost in tax compliance decisions.Levaggi & Menoncin [30] studied the effect of the tax rate on tax evasion decisions and noted that tax evasion increases when the marginal tax rate goes beyond 50% of the income.
Contrary to this finding, Bazart & Bonein [31] found that inequality in tax rates leads to a decreased level of reporting income.Their experiment reveals that taxpayers are more sensitive to horizontal inequality than vertical inequality.As horizontal equity dominates, vertical equity tax authority requires people to treat in the same way rather than giving rewards under the same circumstances.However, Fan & Liu [32] shed light on the importance of having effective tax incentives to improve tax compliance.However, they revealed that tax incentives are ineffective in countries with weak tax enforcement and a higher level of tax fraud.

Psychological Factors
Empirical findings of the neoclassical approach in tax research advise deterring taxpayers' illegal behavior with controls and punishment [33].As there is an undesirable side effect of the control and punishment approach, it might be counterproductive in the long run.Therefore, increasing attention is received for psychological variables like attitudes [34], social norms and perceived fairness.Kogler, Muehlbacher & Kirchler [35] argued that traditional economic factors such as audit probability and fine determine the perceived power of authority to enforce the compliance while psychological factors such as perception of the tax system and social norms affect the trust in tax authority results to maintain voluntary compliance.From the fairness perspective, taxpayers compare contributions and benefits and relatives to others [36,37].Empirical findings confirm that distributive fairness, procedural fairness and retributive fairness are strongly related to tax compliance.Collins et al. [38] examined the relationship between distributive justice and entrepreneurial behavior and found that non-productive entrepreneurs seeking aggressive benefits are negatively related to distributive justice but positively related to corruption.The important research conducted by Kogler et al. [35] found that procedural and distributive justice perception predicts voluntary compliance, and trust in authority mediate the relationship.The relationship between retributive justice and perceived fairness mediates institutional power.
Randlane [39] defines tax morale as a socio-psychological factor influencing tax compliance.
McKerchar [40] pointed out that a person's internal motivations to comply with tax obligations are commonly characterised by tax morale explained by personal integrity.Robbins & Kiser [41] found that taxpayers are intrinsically motivated to pay taxes beyond the preview of the Internal Revenue Service as they believe that tax obligation is the right thing to do.Hence, they conclude that morality and moral attitudes are more than deterrent action on tax compliance behavior.Rodriguez-Justicia & Theilen [42] focus on the role of education in sharping tax morale and found that education has an important impact on tax morale.Their results show that highly educated people exhibit a higher level of tax morale in countries with better quality services, fair tax systems and more transparent institutions.Enachescu et al. [43], using self-employed, employed taxpayers and tax auditors, investigate the impact of positive and negative emotion on compliance intention in the process of paying taxes.They categorized ashamed, anger, annoyance, blame, dissatisfaction, fear, guilt, helplessness, insecurity, nervousness, sad and stress as negative emotional experiences and happiness, helpful, regretful, relieved, satisfaction, secure and surprised as a positive emotional experience.Bobek et al. [44] explore the role of social norms in tax compliance decisions.They found that individuals' ethical beliefs (personal norms) and expectations of close others (subjective norms) directly influence the tax compliance decision.Further, they found that general societal expectation (injunctive norms) and other individuals' actual behavior (descriptive norms) indirectly influence tax compliance behavior.

Institutional Involvement
Institutional involvement in tax compliance is widely discussed in the literature.Pickhardt & Prinz [45] discussed taxpayers, lawmakers/policymakers, tax agents, and tax authorities as different institutions in tax compliance.Pickhardt & Prinz [45] identified a hierarchical relationship between taxpayers, tax authority, tax practitioners/tax agents and policymakers.Tax authority uses different forms of power to maintain tax compliance amongst citizens and businesses [46,47].Hofmann et al. [48] studied the effect of coercive power and legitimate power on tax compliance decisions.The individual analysis of coercive and legitimate power suggests that taxpayers perceive tax authority as cops and pay taxes based on the pressure.
In contrast, legitimate power increases reason-based trust about the tax authority and complying with tax laws because they believe that tax authority assists in tax issues.Even the legitimate power more relevant than coercive power, Hofmann et al. [48] assumed that coercive power and legitimate power exercise in combination would generate the highest degree of tax compliance.As agents of taxpayer's, tax professionals act as intermediaries between tax authorities and influence the taxpayers' compliance attitude [49].Previous research investigates the influence of taxpayers' compliance attitude by the provision of tax services by the incumbent auditor, their tax preparation cost, industry expertise in tax compliance decisions.Devos [50] found that taxpayers purchase tax agent's services for several reasons.
They purchase tax agent services to lodge accurate tax returns due to lack of knowledge about tax rules and to minimize the tax bill, fear making mistakes and being penalized or lack of time to attend own tax compliance.McGuire et al. [51] examined the impact of external audit firms associated with client tax avoidance.Their findings suggest that firms that hire audit firms with industry-specific tax experts exhibit a higher tax avoidance level than firms that do not hire audit firms with tax experts.

Emerging Trends
Papers published in the recent past shows emerging trends in studying tax compliance behavior.Argilés-Bosch, Somoza, Ravenda, & García-Blandón [52] empirically identified that those firms significantly avoid taxes more than traditional firms.Agrawala & Wildasin [53] identified that e-commerce business practices support multination firms to set up business entities in low tax jurisdictions and shift the profit by setting intra-company pricing to avoid taxes.Even though e-commerce increases the tax base's mobility, it facilitates revenue authorities to enforce destination-based taxes to avoid revenue loss to the state [53].In the recent past, researchers have attempted to investigate the behavioral intention of taxpayers about technology adoption in tax compliance.LaMothe & Bobek [54] examine whether individuals are more willing to tell economically motivated lies to a computer system than a human tax professional.As the computer system does not have social presence and detectability, the taxpayer deliberately attempts to commit an intentional non-compliance on their tax return.Therefore, this study suggests that taxpayers who use the electronic tax system are more willing to lie about their taxes because lies are less likely to detect and have a less social presence than tax professionals.Haryani et al., [55] studied perceived detectability, social presence, ease of use and performance expectancy of the technology-driven tax system.However, it is yet to explore the appropriate model to evaluate the compliance intention of taxpayers in the digital space.

Methodology
Tax compliance is a phenomenon in which citizens and businesses interact under the context they live.
McKerchar [40] explained that tax compliance behavior as a complex phenomenon could not be understood by studying the causal relationship of variables.Kirchler [36] identified that people comply with taxes based on their perception of the tax system.Taxation as a social phenomenon involves studying human behavior through qualitative strategy to help researchers answer the research questions [40].Yong [56], in his research, revealed that it is essential to build trust and relationships among Asians to get the appropriate access to correct information in taxation research.To avoid the difficulty of accessing the data, he suggests conducting participatory centric research to get an in-depth understanding of the actual behavior of taxpayers.Hence, the phenomenological study discusses the essence of the experience of a group of individuals incorporating what they have experienced and how they have experienced it.The current study is exploratory in nature uses phenomenology to describe the common meaning of the lived experience of participants about the phenomena [57].
Phenomenology studies the lived experience through consciousness [58].Smith and Thomasson [59] described consciousness as an "essence of the experience of people".Creswell and & Poth [57] criticize phenomenological methods as they noticed few challenges in conducting research.They argued that selecting participants for the research and bracketing personal experience is difficult.The first challenge of selecting the participants can be overcome by incorporating a "bounded system" discussed by Yin [60].Even the case study does not identify as a different method by phenomenologists; it is used as a product for phenomenological analysis.Using the key informant researcher can set the boundaries of selecting participants.The current research used a key informant to identify the boundary of micromultinationals operating in the digital economy in Sri Lanka.Interpretative Phenomenological Analysis (IPA) explored by Smith et al. [61] provides the answer for the second challenge of bracketing.IPA identifies how to bracket the researcher's prior knowledge about the phenomena and the reduction process used to analyze the data.Hence, the current study selects IPA to collect and analyze data to address the bracketing issue that exists in phenomenological methods.To enhance the quality of analysis and maintain the validity, following Yong [56] recommendation to build trust and relationships with the entrepreneurs in the digital economy to get an in-depth understanding of their tax compliance behavior.
Saunders et al. [62] suggest non-probability sampling for exploratory research as it provides an information-rich case study to undertake an in-depth study based on subjective judgment.Creswell [63] suggests the purposive sample technique for phenomenological studies as it helps identify more relevant participants to collect rich information.For the current research, Small and Medium Enterprises operate as a captive center engages in IT/BPM business activities in more than one country selected to collect data.Creswell [63] suggest including 5 to 25 participants to collect data.Smith [64] suggested that in phenomenological studies, researchers use a small sample size to collect the data from the respondents as the phenomenological analysis concerns a detailed account of individual experience [61].As the IPA focus on quality, not quantity, due to the complexity of human phenomena suggest four to ten participants with more than one interview.Based on the recommendation by Smith et al. [61], we selected eight micro-multinationals with the support of the key informant.Accordingly, seventeen interviews were conducted to understand their tax compliance behavior in-depth.

Data Analysis
After immersion of data gathered from phenomenological interviews with each entrepreneur, textual analysis performs to get the participant's explicit meaning for exploratory commenting [61].At the exploratory commenting stage researcher generated 86 conceptual codes.Creswell & Creswell [65] highlights that we have to reduce the basic codes to a manageable level to identify themes.Using phenomenological reduction process reduce conceptual codes by mapping interrelationships, connections and patterns to 21 emergent themes.Out of 21 emergent themes, nine themes were identified as not relevant for further analysis of the data to answer research questions.Smith et al. [61] advised that these themes were discarded, and other themes map based on content seminaries and dissimilarities.Twelve superordinate themes were developed with the participation thinking about the phenomena, researcher reflection, and subject understanding; 12 superordinate themes were developed.Based on superordinate themes, the researcher determines three concepts of tax compliance behavior.The research findings are organized under each superordinate theme discussed in the following section.

Research Findings
In-depth ideographic analysis of participants' accounts generates 12 superordinate themes.These superordinate themes were categorized into three main themes-based contentment seminaries of the subject area.Researchers attempt to use participants' words in the themes, and where the suitable wordings not found in the appropriate quote title selected ensure the theme content.Main themes and superordinate themes are presented in Figure (1).

Main Theme 1 -Capability
The main theme of capability represents the perception of participants about the ability of tax authority in managing the tax compliance behavior of entrepreneurs.The literal dimension of capability is represented by the following themes from the cross-case analysis.

Support of Tax Authority
Entrepreneurs perceived that when tax authorities established an ecosystem to support taxpayers, they would comply with their taxes.Shashi and Stephen explained that Inland Revenue Department could establish an ecosystem setting up private and public partnerships by hiring consultants to help them.

 "There are two parties to support. Number one is the tax authority. I think they give good guidance as to what you have to do, taxes and tax slabs and all of that".  "….. so what authority wants to do is to create an ecosystem that supports to grow entrepreneurs.".
In complying with taxes, the right guidance provided by tax authority shows the better position in the minds of entrepreneurs.
Wickram discussed his experience of interaction with the tax authority.
 "It was not a good journey with tax officers.We went there four or five times to clarify a tax matter we faced.Every time they started telling different things.That was a bit of disappointment".
Even tax authorities did not focus on client orient service.When taxpayers visit the tax department, they perceive that they are not doing justice for the tax money they paid for the public good.
 "If the department is not giving the right guidance and whatever things we want to get it from them in a legislative way, I do not think we should pay tax".
The participant was made a serious statement about paying taxes based on his treatment from tax officers.When there is a bad impression in taxpayers' minds, they lose trust in the tax authority.It will create a disadvantageous position for government revenue.

Punishment for non-compliance
Participants expressed that penalties in developed countries are very strict than in developing countries.Hence, their non-compliance level is very low compared to developing countries.
 "People I have interacted in the USA is very strong.You know, they follow the rules and structures.The USA tax authorities and structures, and governance and all of that is very strict". In the USA, the adherence is very high, because I believe that the penalties for lack of adherence are very much high".
Participants perceived that when there are strict rules and regulations in the country, people will often comply with their taxes.Therefore, they believed that tax authorities should impose strict penalties to discourage non-compliance.

Taxpayer education
The level of tax knowledge gathered from various options and the use of the tax knowledge to manage tax compliance obligations were discussed by participants at the interviews.Wickram expressed that taxpayers' education in Sri Lanka is inadequate for taxpayers to understand their tax obligation.
 "The knowledge transfer is very limited in Sri Lanka.It is not adequate".
From the entrepreneur's point of view, Terrence expressed,  "How many entrepreneurs read tax laws of the country?You are scared about the situation where you do not know about it.We have to educate entrepreneurs about tax law".

Neighbors reporting behavior
Entrepreneurs believed that Inland Revenue Department as the tax administrator in the country has the responsibility to educate entrepreneurs to acquire the proper tax knowledge.
 "I have not got anything like that.You know, no orientation nothing.You are supposed to find out stuff on your own".
It shows the importance of having a tax orientation program for newly started businesses to get firsthand knowledge about taxes applicable to them and their compliance obligation.
Participants believed that the tax administrator's primary responsibility is to collaborate with other agencies to educate entrepreneurs with applicable rules and regulations, tax benefits and exemptions.It will support them to organize their business in complying with tax regulations.
The participant is questioning that;  "Honestly, why won't they teach this in schools?So that school children can help their parents to pay taxes.We are talking about universities where I did not learn anything of this.I do not think more people are paying taxes or more companies paying taxes".
Emphasizing further about tax education, Upekha explained that there are many incubation programs in the country to produce entrepreneurs by the university or after Advanced Level (A/L).Therefore, he suggested including a tax orientation course in the curriculum.

 "Nowadays lots of entrepreneurs start from universities or after A/L. You might have three months tax orientation course as a part of their curricular".
Interestingly, entrepreneurs reveal the need for tax education to improve taxpayer literacy among citizens and businesses.

Loopholes in the tax system
People search loopholes or benefit from loopholes to maximize their tax savings.It is the perception of entrepreneurs about tax law in the country.The participant's flexibility indicates how people work around tax law to get undue advantages.
 "In Sri Lanka, the tax laws are there.It is good.It is much more flexible.I think there are more loopholes that you can workaround.This is good for entrepreneurs and so on <lough> as the strictness is less".
When taxpayers perceive that tax law is less strict, they try to find an evading opportunity as an obvious reason for them to gain advantages.

Main Theme 2 -Taxpayer confidence
Participants perceived that taxpayer confidence influences their tax compliance decision.Their belief represents the following theme identified by cross-case analysis of participants' accounts.

Tax benefits
The benefit is something that taxpayers are expecting from the tax authority.
 "People pay taxes for the benefit they reap.I think it pays a lot to be compliant".
 "Right now, you do not have any benefits.When you get more benefits, people are more willing to pay taxes".
Stephen and Upekha discussed the need for benefit as benefits are lacking in the tax system.They do not expect benefits individually.Their intention is a public good in infrastructure, government services, and good governance.The one reason that Terrance highlighted in the interview is that politicians should be separated from the machinery of running the country to ensure good governance.
Wickram brought an excellent example referring to the moratorium scheme given by the government.
 "All most three-quarters of companies not paying taxes.Company pays taxes should give aggressive benefits.Because other guys are enjoying free benefits.It is not fair". "Most of the companies does not have collaterals.You should be given a collateral-free loan if you are a tax-paying company.Those kinds of things should link in.Because you have done your duty." Participants discussed that IRD could not do this alone.Everyone should be collaborated with the tax department to manage the tax compliance behavior of people.The Central Bank and the Ministry of Finance should collaborate with tax authorities to implement a tax benefit scheme.

Neighbours reporting behavior
Wickram discussed the remedy that the tax department take against non-compliance.

 "I am willing to pay taxes today. I am paying taxes as long as I can see, what is the remedy that is going to take for other people who is violating tax?"
Participants perceived that the neighbour's compliance attitude influences their compliance decision.As long as people see no action against neighbours who are not paying taxes, they discourage complying with tax law.

Complexity of regulation
Analysis of participant's accounts emerged two sub-themes, process complexity and information complexity.Participants feel uncomfortable with the compliance process when there are multiple tax rules, too much documentation, and not having clear and direct communication in dealing with taxpayers.
 "Right now, in Sri Lanka, there are multiple acts, and there are multiple frameworks.Uncles, you consult somebody who knows about it you are not aware of rules applicable to you".
Having multiple rules create complexity in the minds of taxpayers.To manage their tax affairs often, they have to consult tax advisors.Too much documentation also creates a burden for entrepreneurs to comply voluntarily.
 "There are lots of pillars to post pushing and too much of documentation.I would say when coming to Sri Lankan tax system, very, very, very cumbersome".
Wickram explained the complexity of the tax system in Sri Lanka.He explained his experience with opening a tax file and the difficulties faced at the department.
 "… process is very cumbersome.I happen to open a tax file.You must go to three or four places in the tax department.The first day when I went, the lady doing my tax file was not there.When I was going on the second day, this lady told me something else.So, from a citizen point of view, I feel they are not doing a job right and waste people's time.To provide superior service, they can improve their cycle".
Another difficulty that participants experienced was not understanding the information contained in departmental communications.
 "Department communication not given in a form where a layman could digest it.Department directives are more or less beneficial for a tax consultant who understand them.It is not for laymen or entrepreneurs.That is why generally we go by the communication sent by big firms" Further, Sudarshan added that;  "Department does not know how to translate tax law to understand by an average man.This difficulty creates a distance between taxpayer and tax authority".
Shashi also explained her experience comparing the Silicon Valley system;  "The way they interpret it is crazy, and it does not seem to be conducive towards a start-up or anyone."

Transparency of use tax money
Participants show interest in knowing how their tax money produces a public good.
 "Why do you pay taxes?We pay taxes because of government are giving certain support in terms of infrastructure, legal framework, administrative structure.Moreover, the government runs out of money we paid".
Chris tries to highlight people's moral duty to pay their gratitude for the motherland who brought up every citizen through free education and free healthcare services.Even citizens paying their gratitude to their motherland are worried about collecting taxes and utilizing them.
 "Somebody has to start paying taxes.If everybody starts saying no, then nobody is going to pay taxes.I would pay taxes, but I wanted to see what the action plan is".
It is the one motive that people have in their minds when they pay taxes.They wanted to see why the government needed money and whether the money paid went into the purpose.
 "We get the best people because tax money is used to produce good products from government universities.What is not transparent is whether the IT tax money goes into producing a good IT workforce".
If the government can link the tax money with the national outcome, it creates a clear picture in taxpayers' minds.They are motivated to comply.It helps to remove tax-free mentality from their minds as they visualize the use of their tax money for the given purpose.
 "If they say there is tax money collected from IT industry and how much money goes into capacity development, infrastructure development, invest on telecommunication development, develop policy framework then there is a transparency about the money this sector paying".

Taxpayer knowledge
Many instance participants expressed that they used their tax knowledge to manage their tax affairs.
 "For the basic stuff, we use our own tax knowledge". "Definitely, I am seeing the computation before to proceed the tax payment basically to look at whether we can get any sort of tax benefit.Not to evade but to get the benefits". "Until I appointed an external consultant to handle my taxes, I used to do it my own." Being an entrepreneur, they need to know the tax rules as it impacts their business operations.Chris cites his experience in handling US taxes.
 "I paid Delaware Franchise tax in January.Now IRS taxes is pending.So, I am doing an assessment." Stephen, Wickram, Chris, and Terrence experience shows how tax knowledge is essential in day-to-day business operations.When entrepreneurs have a fair knowledge about taxes, they are committed to doing their compliance obligation.Darrel brought another context of needing the understanding about taxes.

 "You have to know that because IRD might come and charge on you. You should know about those things"
Darrel explained the benefit of knowing the penalty structure and charging process.When entrepreneurs know the penalties and their severity, they try to avoid them as it is painful.
Terrence explained his experience with the assessment issued by the tax department for the WHT claim.
 "….. we went to the court disputing the penalty…..It is a matter of principle.We take the stand that we were not liable because we are not the collecting agent…." Even entrepreneurs go with external tax consultants to manage their tax affairs.They believe that it is essential to know the fundamental aspect of tax law as it benefits in structuring their business models and transactions.Sudarshan highlighted that,  "It is not going to make a change in the compliance, the reason there is a lack of knowledge."

Main Theme 3 -Technology Adoption
Technology adaption as a theme was identified based on the comments given by participants as a solution for most of the issues discussed previously.The main theme of technology adaption represents by the following superordinate themes.

Automation
The participant discussed that technology makes it easy to perform their compliance duty and helps them save time and compliance costs.That is the reason Sudarshan explained,  "it is defiantly going to make more convenient".
Participants believed that digital transformation in taxation saves cost and time.
 "Digital transformation going to help so much.And, it also reduced cost in every way.Even reducing time is a reduction of cost.Sri Lanka would be way better in that kind of stuff".
Chris believes that with the increase of economic conduct of the country, the manual process does not support carrying out an operation in an efficient way unless there are processes and systems in place.
 "As the population grows and problems become complex, these complex problems cannot be resolved using manual methods.You need automation".
Darrel also supports this argument.
 "Whatever technology use will give the benefit that no doubt.Best technology less problem less room for corruption".

Traceability
With the digital transformation, participants discussed the importance of having end to end connectivity.
 "Ultimately, the objective of the tax department or entire government is to have the endto-end automation of taxes".
Participants believed that end to end automation would facilitate linking everyone in the value chain and trace their economic activities.
 "If you look at digitalization and online, it is the only mechanism where every transaction can trace.If you look at another mechanism, pay by cash, voucher or cheque it is impossible to trace them".
Participants explained the possibility of tracing transactions.If the payment is digitized, then every transaction can be traced.Tax authorities can get confirmation about the income and expenses of people connected with the system through the system.
 "So, digital payment is the legitimate way of making payment".
Even people do not want to make an online payment, and it is the legitimate way to enter into the transaction.Government has to take their power to bring this regulation into the policy to support tax authority.Wickram elaborates this with an example.
 "If the car sales guy records revenue in the online system, then you can backtrack and find how I get the money to purchase a car.If you cannot trace where I generated money to purchase my car, you have a question to ask me.You have to look at the entire value chain and start from the lowest point where the transaction happened and then backtrack"

Knowledge of tax authority
When it comes to digital transformation, another critical factor participant discussed was the knowledge about systems and processes.Darrel discussed bout the implication of cross-border transitions.
 "When it comes to cross-border deals, it is complex.It is kind of a unique tool.There is definitely a big loophole".
Being a micro-multinational, he acknowledged that there are loopholes that they can play around.At the later discussion, he brought that the government is losing revenue from international eCommerce business as the revenue officials and policymakers lack the knowledge to trigger taxing points in ecommerce transactions.
 "The guys who are coming with their caliber normally know the pettah market.They are the ones who come to investigate the e-commerce business.It is like they do not understand that.We cannot blame them".
Darrel shared his personal experience with the revenue officials.The way they enter and analyse the business shows they have a general understanding of the business operation.He highlighted it by referring to the Pettah market.He purposely took this example to show the complexity in the eCommerce business, and the level of knowledge tax officers should have to assess those businesses to trigger tax liability.Wickarm and Stephen emphasized that the new economic wave is happening in the digital world.
 "Authorities have to figure out how to tax online business.They are struggling".

Conclusion
The tax compliance attitude of citizens and businesses, involvement of various institutions, and the different factors influencing to perform tax compliance obligation are important antecedents of tax compliance behavior of entrepreneurs in the digital economy.The tax compliance attitude of citizens and businesses influences deciding whether to comply or not to comply.Positive influence factors like tax transparency, tax benefits, support of tax authority and ease of doing taxes push taxpayers to comply with their tax obligations.The lower level of taxpayer literacy, the complexity of tax law and the bureaucracy of the tax authority led taxpayers to evade the taxes.Hence, policymakers should identify appropriate measures to convert negative factors to positive ones to increase tax compliance among technopreneurs in Sri Lanka.
Technology is an emerging factor that influences tax compliance behavior.Tax authorities can use technology to connect every citizen and business with the electronic tax system.End to end automation increase the traceability level of the economic activities of taxpayers.On the other hand, the adoption of technology enhances the effort and performance of tax compliance activities of taxpayers.Building trust in taxpayers' minds by tax authorities is important in Sri Lanka.Tax authorities should have adequate power to correct wrong behavior among citizens and businesses.In the digital era, tax authority requires to adopt proper technological tools to connect everyone in the compliance value chain to avoid tax compliance burden and trace the economic activities of the citizens and businesses in the country.