There are a number of theories that may be relevant to the tax issues faced by rural small and medium-sized enterprises (SMEs). Some possible theories that might be useful include:
Public choice theory: This theory focuses on how individuals and groups make decisions in the political arena, including decisions about tax policy. This theory could be helpful for understanding the motivations and incentives of policymakers when it comes to tax policy for rural SMEs.
Institutional economics: This theory emphasizes the role of institutions and their rules and norms in shaping economic behavior and outcomes. This theory could be useful for understanding the institutional frameworks that shape tax policy for rural SMEs, such as the laws and regulations that govern tax collection and compliance.
Development economics: This field of economics focuses on the economic, social, and political factors that influence economic development, including issues related to taxation. This theory could be helpful for understanding the role that tax policy plays in supporting the development of rural SMEs.
Tax incidence theory: This theory examines how the burden of a tax is distributed among different economic agents, such as consumers, producers, or workers. This theory could be useful for understanding the impact of different tax policies on rural SMEs and the communities they serve.
I hope these theories are helpful as you consider the tax issues faced by rural SMEs. Please let me know if you have any further questions.
Generally speaking, whether rural or urban, SMEs are designed to reduce unemployment rates. So it would help if you thought of unemployment, inflation, and tax rates. A unified theory for this is the Modern Monetary Theory (MMT).
The following article is a good source for Modern Monetary Theory (MMT) about SMEs and Tax.
Carnevali, Emilio and Deleidi, Matteo (2022) The trade-off between inflation and unemployment in an ‘MMT world’: an open-economy perspective. European Journal of Economics and Economic Policies: Intervention. pp. 1-35. ISSN 2052-7764 (In Press)