The study set out to investigate the influence of tax education on tax compliance. It unearthed a lacuna between tax education and tax compliance which indicated an interplay between the theories of economic deterrent, reasoned action and the theory of planned behavior. Tax non-compliance was attributed to unfairness, dishonesty by colleagues submitting incorrect tax returns, and the complexity of the tax system and tax forms.
The issue of tax compliance from SMEs in developing countries has remained a blighting problem for a long time. Despite tax education being diagnosed as the panacea for improving tax compliance from small business owners, the situation has not changed. A divide regarding the issue of tax education as influencing the collection of tax from SMEs still exists among researchers.
Some scholars indicate a positive effect of tax education on compliance and others view tax education as a recipe for propagating tax evasion. However, for developmental projects to improve the lives of the citizenry, educating tax-payers aims to improve revenue collection from this category of business people. This study employed an exploratory concurrent mixed research approach on 98 SMEs operating within the Ojtiwarongo district.
Table of Contents
1. INTRODUCTION
1.1 Research questions
2. LITERATURE REVIEW
2.1 Small and Medium Enterprises (SME’s)
2.2 Genesis of Tax Compliance Research
2.3 Theories of Tax Compliance
2.3.1 Theory of Planned Behaviour (TPB)
2.3.2 Economic Deterrence Theory (EDT)
2.3.3 Theory of Reasoned Action (TRA)
2.4 The Fischer Model
2.4.1 Fisher Model and Major Influences of Tax Compliance
2.5 Categories of Tax Compliance
2.6 Attitudes,Tax Education and Compliance
2.7 Perceptions and individual taxpayer education and compliance
2.8 Tax knowledge, tax education and compliance
3.RESEARCH METHODOLOGY
3.1 Population
3.2 Pilot study
3.3 Sampling and sampling procedures
3.4 Validity and reliability
3.5 Ethical considerations
4. DATA ANALYSIS
4.1 Demographics
4.2 Objective One
4.3 Objective Two
4.4 Interview questions and responses
4.4.1. Do you feel that you paying a fair tax?
4.4.2 Do you believe the current tax system is complex to understand?
4.4.3 Do you think by not paying tax there is a probability of detection and penalties?
4.4.4 Do you think by not paying tax there is a probability of detection and penalties?
5. Observations from primary data
5.1 Quantitative study results
5.2 Interview opinions of SMEs on tax
Research Objectives & Key Themes
The study investigates the relationship between tax education and compliance among Small Business Enterprises (SMEs) in the Otjiwarongo district, Namibia, employing a mixed-method research approach to identify why tax non-compliance persists despite various educational initiatives.
- Analysis of tax compliance theories, including the Fischer Model, Economic Deterrence Theory, and Theory of Planned Behavior.
- Evaluation of tax knowledge levels and their impact on compliance behaviors among SMEs.
- Assessment of the complexity of the tax system and its role as a barrier to voluntary compliance.
- Examination of social perceptions, ethics, and the perceived fairness of the tax structure.
- Development of actionable policy recommendations to enhance tax collection and SME growth.
Excerpt from the Book
The Fischer Model
The Fischer tax compliance model gives a framework for understanding the causes or influences behind tax non-compliance decisions. Compliance refers to fulfilling all tax obligations as required by the tax laws of the country (Gitaru, 2017). In the context of the Namibian tax regulations, when a taxpayer submits tax returns at the end of the financial calendar, compliance would have been completed. A myriad of research has been conducted on tax non-compliance and researchers have proffered various factors. For example, Mohd (2010), categorises these factors as linked to age, gender, education, income, occupation or status, peers’ or other taxpayers’ influence, ethics, legal sanction, complexity, and perceived fairness of the tax system.
The perception of individual taxpayers regarding the fairness or the unfairness of the tax system is taken to be a significant factor towards influencing tax compliance characteristics of individual taxpayers. The tax system that is taken or perceived to be unfair by people in the country has the aspect of failing to succeed which means that it easily encourages the taxpayer to develop a noncompliant behaviour (Gilligan and Richardson, 2005). The attitude towards tax and tax education is viewed as a predictor towards tax compliance behaviour. The attitude of a person towards an object, or event can be favourable (positive) or unfavourable (negative) and the negative evaluation is considered the most significant feature of individual’s attitudes. This, therefore, means that taxpayers with negative or unfavourable attitudes towards tax compliance will be non-compliant (Kirchler, 2008).
Summary of Chapters
1. INTRODUCTION: Provides the background of the study and outlines the specific research questions regarding tax knowledge and compliance attitudes among SMEs.
2. LITERATURE REVIEW: Reviews existing theories of tax compliance and the Fischer Model while examining the role of education in influencing taxpayer behavior.
3.RESEARCH METHODOLOGY: Details the exploratory concurrent mixed-method research design, sampling procedures, and ethical considerations for the study.
4. DATA ANALYSIS: Presents the demographic profile of respondents and evaluates data concerning tax education levels and attitudes towards compliance.
5. Observations from primary data: Synthesizes findings from quantitative results and qualitative interviews, highlighting key themes and concluding with policy recommendations.
Keywords
SMEs, tax education, tax compliance, Economic deterrent theory, Theory of reasoned action, Theory of planned behavior, Namibia, tax system, tax evasion, business regulation, fiscal policy, Otjiwarongo.
Frequently Asked Questions
What is the core focus of this research study?
The study investigates the nexus between tax education and tax compliance among Small Business Enterprises (SMEs) in the Otjiwarongo district of Namibia.
What are the primary themes discussed in the work?
Key themes include the impact of tax knowledge on compliance, the influence of tax system complexity, the role of perceived fairness, and the deterrence effect of potential penalties.
What is the central research question or objective?
The study aims to explore the level of tax knowledge among local SMEs, examine their attitudes toward compliance, and provide recommendations to improve tax collection.
Which scientific methodology is utilized in this study?
The researcher uses an exploratory concurrent mixed-method approach, combining quantitative surveys with qualitative interviews to gain a comprehensive understanding.
What topics are addressed in the main body of the work?
The main body covers a literature review of compliance theories, detailed methodology, statistical analysis of survey data, and an analysis of thematic opinions from business owners.
Which keywords best characterize this publication?
The work is best characterized by terms like SMEs, tax compliance, tax education, Fischer Model, and fiscal policy in developing countries.
How does the complexity of tax forms affect compliance according to the study?
Participants frequently cited complicated tax forms and the high cost of hiring accountants as significant barriers that hinder their ability to comply with tax regulations.
What role does the Fischer Model play in this analysis?
The Fischer Model serves as the conceptual framework to organize and analyze the various demographic, social, and psychological factors influencing tax compliance behavior.
What specific recommendation does the author make for the Ministry of Finance?
The author suggests simplifying tax forms, providing practical tax training in local languages, and implementing tax incentives for timely filing to encourage compliance.
How do SMEs in Otjiwarongo perceive the fairness of the tax system?
Many participants felt that the current tax structure is unfair and overly burdensome, leading to a perception that high tax rates discourage business growth and expansion.
- Citation du texte
- Cosmas Mwanza (Auteur), Victor Katoma (Auteur), 2019, The Nexus of Tax Education and Compliance Among Small Business Enterprises, Munich, GRIN Verlag, https://www.grin.com/document/509819
