Translating Tax and Regulatory Requirements into SME Compliance Workflows: A Conceptual Framework for Implementing IAS 12, VAT, PAYE, and Withholding Tax

• Author(s): Ruth Arogbeoritse Eyetsemitan; Kazeem Babatunde Ambali; Ajibola Oluwafemi Oyeleye; Oladapo Fadayomi
• Paper ID: 1716956
• Page: 621-641
• Published Date: 31-05-2021
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 4 Issue 11 May-2021

Abstract

This study develops a conceptual framework for translating complex tax and regulatory requirements into structured, implementable compliance workflows for small and medium-sized enterprises (SMEs). SMEs often face significant challenges in interpreting and operationalizing standards such as International Accounting Standard 12 (IAS 12) on income taxes, Value Added Tax (VAT), Pay-As-You-Earn (PAYE), and Withholding Tax due to limited technical capacity, fragmented processes, and evolving regulatory landscapes. The proposed framework addresses these gaps by integrating regulatory interpretation, process mapping, data standardization, and digital workflow automation into a unified compliance architecture. It conceptualizes compliance as a cyclical system consisting of requirement identification, rule codification, transaction classification, automated calculation, reporting, and audit trail generation. The model emphasizes the translation of statutory provisions into decision rules and control checkpoints embedded within SME financial operations, thereby reducing ambiguity and enhancing consistency. Drawing on principles from accounting systems design, regulatory technology (RegTech), and business process management, the framework introduces modular compliance layers aligned with IAS 12 deferred and current tax recognition, VAT input-output reconciliation, PAYE payroll integration, and withholding tax deduction and remittance processes. It further highlights the role of digital tools, including enterprise resource planning (ERP) systems and cloud-based accounting platforms, in enabling real-time compliance monitoring and error detection. The study also incorporates risk-based controls and documentation protocols to support audit readiness and regulatory reporting obligations. The framework contributes to both theory and practice by offering a scalable, adaptable model that can be customized across jurisdictions while maintaining alignment with international accounting standards and local tax laws. It provides SMEs, policymakers, and system developers with a structured approach to embedding compliance into daily operations rather than treating it as a periodic or reactive activity. Ultimately, the study advances the discourse on SME sustainability by demonstrating how streamlined compliance workflows can improve financial transparency, reduce regulatory penalties, and enhance organizational resilience in dynamic economic environments.

Keywords

SME Compliance, IAS 12, VAT, PAYE, Withholding Tax, Regulatory Workflows, Accounting Systems, RegTech, Financial Reporting, Tax Automation

Citations

IRE Journals:
Ruth Arogbeoritse Eyetsemitan, Kazeem Babatunde Ambali, Ajibola Oluwafemi Oyeleye, Oladapo Fadayomi "Translating Tax and Regulatory Requirements into SME Compliance Workflows: A Conceptual Framework for Implementing IAS 12, VAT, PAYE, and Withholding Tax" Iconic Research And Engineering Journals Volume 4 Issue 11 2021 Page 621-641

IEEE:
Ruth Arogbeoritse Eyetsemitan, Kazeem Babatunde Ambali, Ajibola Oluwafemi Oyeleye, Oladapo Fadayomi "Translating Tax and Regulatory Requirements into SME Compliance Workflows: A Conceptual Framework for Implementing IAS 12, VAT, PAYE, and Withholding Tax" Iconic Research And Engineering Journals, 4(11)