THE GIG ECONOMY: CHALLENGES FOR TAX SYSTEM

Tax system in this modern day is inherently complex and dynamic in nature coupled with the fact that it is being influenced by a variety of factor. The main objective of this study is to evaluate tax compliance in the gig economy: the need for transparency and accountability. Using the Saunders’ Research Onion layers, the study employed the use of quantitative data and qualitative data. Structured questionnaire and interview were used as data instrument. Data collated werecoded and then subjected to analysis.Theresultof the findingsshows that 66.6 % of the respondentsstronglyagreedto tax compliance. The findings of the study also shows that 33.3% strongly agreed, agreed, disagreed and strongly disagreed that tax system does not take gig economy inti consideration while designing it. Theresultalsoshows that challengesbeing faced by gig workers in reluctanceto tax paymentincludepoor communication from tax authority, platform not doing enough and social norms. Conclusively, tax systems did not put gig economy into consideration when been designed.


Introduction
The modern Tax system is inherently complex and dynamic coupled with the fact that it is being influenced by a variety of factors (Tran-Nam, 2016).Operations and processes within the tax system, societal attitudes and interactions with tax authorities, cross-border transactions, technological advancements, and international economic integration pose challenges to its efficient and effective functioning (Tran-nam, 2016).Abraham et al. (2018) posited that the term 'gig' has its origin in the music industry where it was known that independent musicians would record one or two songs and then perform these songs with no expectation of future work.The term "gig economy" which later came up again was then referred to as work doled out in bits and pieces andobtained through an online platform.Riggs et al. (2019) opined that the word gig has been misused to meana variety of terms, such as informal, precarious, non-traditional, or contingent work coupledwith varying shades of meaning.What is economy (20216)definedthe gig economy as a free market system characterized by temporary positions, organizational contracts, and independent workers for short-term engagements.In Ireland and the UK, the term "gig" economy is defined as app-based services done on demand and location (Euofound, 2018).While countries such as Italy, Finland, and Austria, defined "gig economy" in relation to the definition given by Abrahamet al. (2018) (Eurofound 2018).
Gigworkers are identified to be among the unincorporated self-employed who are not paid a wage or salary, do not have an implicit or explicit contract for continuing the working relationship, and do not have a predictable work schedule or earnings (Abraham et al., 2018).According to Puseep (2019), as a gig worker, an individual tends to be flexible with an adjustable work life.The objective of being a gig worker is to have the ability to have control over time and have a high degree of independence.Sinicki (2019) highlighted four key features that define a gig worker and they are, a high degree of autonomy, short-term relationships with customers, payment by task or service, and being connected and employed through a digital platform.
The gigeconomy has many advantagesfor many companies based on the fact that most of these companies are tapping into gig workers as a part of their workforce.In addition, it also increases their flexibility, especially for IT and Business firms, reduced labor costs, and a potential revenue increase (Hill, 2016;Deloitte Insights, 2016).Poon, (2018); Storeyet al. (2018); Taylor and Joshi (2018) also highlighted lower cost, labor at demand as benefits employers can expect to gain from using gig workers In contrast to the involved benefits, one might argue that the growth of the gig economy could be harmful to many industries, as they lose employees to the gig economy and in turn lose competencies as well as face increased competition.Furthermore, not having accurate measures of the gig economy will make it difficult to monitor changes or determine their effects or impacts on the economy.In addition to this,the unique nature of gig work has posed new challenges for the tax system.Current laws and regulations, designed for the traditional form of employment are not always well-equipped to handle how the gig economy works or functions.Thus, creating challenges in terms of tax classification where incomes are not reported leading to tax revenue reduction.
Thereis information on the gig economy, however, looking at the gig economy from the perceptive of the challenges for the tax system are relatively few.Even though some studies have attempted to evaluate challenges in the gig economy most of these papers neglected the challenges associated with it in the tax system as most of these papers are more interested in the actual level of gig work.Thus, the need for this study to look intothe Gig Economy: Challenges for Tax System.

Research Philosophy
This research employed an Interpretivisim approachbased on the fact that the study is focused on the idea and different perspectives of respondents.

Research approach
This research study employed Exploratory research which involves researching a wide range of topics to understand the scope of the work and also made use of interviews in order to explore multiple areas of the study.

Quantitative data
This information was collected through a questionnaire

Qualitative data
For this data extraction, semi-structured interviews were used.This was done through the conduction of structured interviews to know their perspectives and experiences with tax systems.

Data collection instruments
A structured questionnaire and interview schedule wereused in the primary data generation exercise.Secondary data from textbooks, journals, books, newspaper articles, and reliable internet sources were also collected and properly cited.

Online survey
Survey methods were used in the collection of quantitative data.This form of data extraction is known toproduce a piece of inherently statistical information.This form of survey is valuable for studying issues such as public opinions.

Online Interviews
A semi-structured interview guide was developed.The developed interview protocol consists of an introductory section, questions of investigation, and open-ended questions based on the literature about the topic.

Research Technique Validity and Reliability
The validity of the structured questionnaire/interview schedule was examined by experts.Based on the examination of the questionnaire alongside the objectives.The new modifications of the research instrument were then grounded on the comments of the experts before being used for data collection.

Ethical considerations
A matter ofprivacy was considered for this study by allowingthe anonymity of the participants and alsogiving them the option tobe able to withdraw any information they do not wish to disclose.The participants were also aware of what to expect and prepare for regarding what information they wanted to disclose during the interview.Information used in this research paper was also approved by the participants.

Discussion
In the findings of Thomas (2018), it is posited that workers in the gig economy do not realize that they are operating small businesses and that this comes with certain compliance responsibilities.Thus, just like every worker, they are meant to pay tax.Also, the gig economy is fast rising and this has also given avenues for people to engage in it for self-employment, and with this, most people don't see the need for tax payment.This study seeks toaddress"The Gig Economy: Challenges for Tax System".
In terms of the challengesinvolved in tax compliance, the result of thisstudyshows that the majority (46.6%) of the gig workers stronglydisagreed that their platform is doingenough in terms of tax payment while 46.6% stronglyagreed to seek professional help before paying tax.
Thomas (2018) asserts that platforms generally treat gig workers as independent contractors does not mean they are not required to withhold or pay any taxes to tax authorities with respect to these workers (Thomas, 2018).In the result obtained from this study, it was also revealed that most of the gig workers (53.3%) strongly disagreed that the tax system does not favor the gig economy.Thus, the aneed for them to even comply with tax payments.Even with this fact, paying of tax is an issue for them.
Seeking professional help can be a major task that most gigworkers may not want to encounter when complying with taxpayments.Basically, due toformalities and documentation involved.
Thus, they need to notbother payingtheir taxes.Taxpayer has however been identified as a very important subset of a tax system.Beretta (2017) findingstandems with this present study where it was reported that tax rules are usually complex to apply and thus, the reason why workers avoid their obligations because of being overwhelmed with the intricacies of the compliance burden such as formalities of registering and engaging with tax authorities as well as perceived complexities of calculating their taxable income.
Rind's ( 2018) findings indicate that many gig workers lack tax knowledge, making it difficult for them to comply with tax requirements and leading some to avoid paying taxes altogether.
However, this study does not consider the ignorance of gig workers in the gig economy when analyzing the challenges they face.The OECD (2019) argues that ignorance of tax obligations should not serve as an excuse, emphasizing that tax payment is a significant challenge for gig workers.According to the OECD (2019), the complexity of tax filing poses a major hurdle for many gig workers, leading to reluctance to fulfill tax obligations.Therefore, while some gig workers may indeed lack tax knowledge, the primary reason for non-compliance is the complexity of the tax system rather than ignorance.This rationale explains why ignorance is not identified as a challenge for gig workers in this study regarding tax payment.
In this study, the result also shows that social norms to some extentare a major factor that hinders most gig workers from paying their taxes.World Bank (2015) defined social work as informal rules that govern behavior, and how people act and think often depends on how other people around them behave (World Bank, 2015).The findings of Wenzel (2005) show that perceptions of social norms affect taxpaying behavior.The gig economy, certain individuals also argue that because so many other participants in the gig economy are underreporting income realized from the gig economy and other works, they don't see any reason why they should not engaged in this.
i.e., it isacceptable for them to act in a similar fashion.

Conclusion
The result obtained from this studyshowsthatthe gig economy has effect has certain challenges in terms of remitting tax.Poor tax authoritycommunication, a platform not providing information or help on tax payment, social norms, etc. have been identified as the major challenges in the gig economy affecting the tax system.Conclusively, tax systems did not consider the gig economy when designed. Recommendation

Table 1 :
Demographic Characteristics of Gig Workers Further research is needed to examine the gig economy making use I wider participants  Further research should be done to evaluate the challenges and possible solutions in the gigs economy in relation to tax compliance References Abraham, K. G, John C. H., Kristin S, and James R S. (2018).Measuring the Gig Economy: Current Knowledge and Open Issues."Working Paper 24950.National Bureau of Economic Research.https://doi.org/10.3386/w24950.Deloitte.(2017).The 2017 Deloitte Millennial Survey -Apprehensive millennials: seeking stability and opportunities in an uncertain world.Deloitte Touche Tohmatsu Limited Eurofound.(2018).Employment and Working Conditions of Selected Types of Platform Work." https://www.eurofound.europa.eu/sites/default/files/ef_publication/field_ef_document/ef