Tax Compliance among Small and Micro Enterprises: A Case Study of Small and Microenterprises in Abuja, Nigeria.
Keywords:
Tax compliance, tax payers, tax structure.Abstract
Aim: The purpose of this study was to investigate the compliance of tax by among small and micro enterprises in Abuja, Nigeria.
Methods: The study utilized a descriptive survey research design utilizing quantitative and qualitative approaches. The target population to be selected was 540 TOT registered SME tax payers within the Abuja city central business district (CBD) dealing with Information Communication Technology products. The present study adopted a stratified random sampling technique to proportionately select a sample of 54 SMEs from the target population of 540 SMEs.
Results: Tax compliance was strongly correlated with taxpayers’ attitudes (Pearson correlation coefficient = 0.595), tax payers understanding of the tax structure (Pearson correlation coefficient = 0.465), cost of compliance (Pearson correlation coefficient = 0.607) and audits & penalties (Pearson correlation coefficient = 0.609).
Conclusion: There exist less tax compliance among small and micro enterprises in Abuja CBD due to less information about taxation and importance of paying taxes.
Recommendation: The study recommended the government to increase civic education about taxation and importance of paying taxes in schools and colleges so as to foster tax compliant citizens. The study also recommended further research to be done on the implications of increased regional trade by SMEs on tax compliance.
References
Alm, J., Bernasconi, M., Laury, S., Lee, D. J., & Wallace, S. (2017). Culture, compliance, and confidentiality: Taxpayer behavior in the United States and Italy. Journal of Economic Behavior & Organization, 140, 176-196.
Bahl, R., & Martinez-Vazquez, J. (2007). The property tax in developing countries: Current practice and prospects. Lincoln Institute of Land Policy..
Bello, K. B., & Danjuma, I. (2014). Review of models/theories explaining tax compliance behavior. Sains Humanika, 2(3).
Ebeke, C. (2010). Remittances, Value Added Tax and Tax Revenue in Developing Countries. Retrieved November 26, 2014, from http://publi.cerdi.org/ed/2010/2010.30.pdf
Henderson Jr, W. T. (1992). Criminal Liability Under the Internal Revenue Code: A Proposal to Make the" Voluntary" Compliance System a Little Less" Voluntary". University of Pennsylvania Law Review, 1429-1461.
Henderson, W. T. (1992). Criminal Liability Under the Internal Revenue Code: A Proposal to Make the" Voluntary" Compliance System a Little Less" Voluntary". University of Pennsylvania Law Review, 140(4), 1429-1461.
Jaidi, J., Noordin, R., & Kassim, A. W. M. (2013). Individual Taxpayers’ Perception Towards Self-Assessment System: A Case Of Sabah. Journal of the Asian Academy of Applied Business (JAAAB).
Jayawardane, D., & Low, K. (2016). Taxpayer attitude and tax compliance decision in Sri Lanka. International Journal of Arts and Commerce, 5(2), 124.
Kirchler, E., Rodler, C., Holzl, E., & Meier, K. (2013). Conflict and decision making in close relationships: Love, money and daily routines. Psychology Press.
Knack, S. (2001). Aid dependence and the quality of governance: Cross‐country empirical tests. Southern economic journal, 68(2), 310-329.
Kogler, C., Batrancea, L., Nichita, A., Pantya, J., Belianin, A., & Kirchler, E. (2013). Trust and power as determinants of tax compliance: Testing the assumptions of the slippery slope framework in Austria, Hungary, Romania and Russia. Journal of Economic Psychology, 34, 169-180.
Lubua, E. W. (2014). Influencing Tax Compliance in SMEs through the Use of ICTs. International Journal of Learning, Teaching and Educational Research, 2(1).
Luttmer, E. F., & Singhal, M. (2014). Tax morale. Journal of economic perspectives, 28(4), 149-68.
Malima, A. (2013). Enhancing Income Tax Collection in SMEs Customers’ Perspective: A Case of Tanzania Revenue Authority (TRA), Kinondoni. Dar es Salaam: Mzumbe University.
McKerchar, M., & Evans, C. (2009). Sustaining growth in developing economies through improved taxpayer compliance: Challenges for policy makers and revenue authorities. eJTR, 7, 171.
Modugu, K. P. (2014). Impact of Tax Audit on Tax Compliance in Nigeria. Seidl, C. & Traub, S. (2001), Taxpayers’ attitudes, behavior, and perception of fairness. Pacific Economic Review, 6: 255–267. doi: 10.1111/1468-0106.00131.
Mwakabungu, B. H. (2016). Effect of Taxpayer Education on Voluntary Tax Compliance by Value Added Tax (VAT) Taxpayers in Dodoma, Tanzania.
Sandmo, A. (2012). An evasive topic: theorizing about the hidden economy. International tax and public finance, 19(1), 5-24.
Slemrod, J. (2012). Cheating ourselves: The economics of tax evasion. Journal of Economic perspectives, 21(1), 25-48.
Trivedi VU, and Shehata M, (2015) Impact of personal and situational factors on taxpayer compliance: An experimental analysis. Journal of Business Ethics. ;47(3):175–197.
Trivedi, C. and Shehata, N. (2005) Attitudes, Incentives and Tax. Journal of Economic Psychology, 5, 371 – 384.
Weber, E. U. (2010). Risk attitude and preference. Wiley Interdisciplinary Reviews: Cognitive Science, 1(1), 79-88.
Downloads
Published
How to Cite
Issue
Section
License
The authors retain the copyright and grant this journal right of first publication. This license allows other people to freely share and adapt the work but must give appropriate credit, provide a link to the license, and indicate if changes were made. They may do so in any reasonable manner, but not in any way that suggests the licensor endorses them or their use.
