Abstract
Company registers are increasingly becoming a crucial source of business information for many stakeholders. While most company registers have concentrated on simplifying business registrations, reducing the number of procedures, time and cost for small entities to be formed, compliance remains a big challenge for many company registers. Compliance is not just influenced by economic variables of enforcement and penalties but influenced by demographic, socio-economic and institutional factors. The aim of this study was to identify and explain the factors influencing compliance behaviour in filing company annual returns based on the Theory of Planned Behaviour. The study used a mixed research approach. A sample of 165 registered companies was randomly selected from the population of 68,049 active companies on the PACRA register. 9 PACRA officers were selected using judgment sampling and in-depth interviews were used. Primary data were collected through structured questionnaires. The secondary data were also collected by reviewing related published materials. Statistical tests of independence (chi-square tests) formed the basis of analysis. The results showed that annual return filings are influenced both by demographic and external factors. The demographic factors like employment status, age and education were found to positively influence compliance. Further, compliance was highest (68%) among those with tertiary education compared with (47%) those with no form of schooling. The study also revealed that those in formal employment were more compliant (64%) than those without employment (47%). Gender was found to be an insignificant factor and it has no influence on compliance. On external factors, cultural norms, government policies and compliance fees were identified in the study and were found to have an influence on compliance (save for compliance fees). Finally, the findings of the study may guide government institutions to save on enforcement costs (i.e. before they implement costly sensitization campaigns and educational clinics, they need to understand variables that affect compliance behaviour). The study findings can help policy makers and PACRA meet their strategic goals of raising compliance levels.
Highlights
Business Registers1 hold a great deal of information, but the extent of the information depends on different legislations
With the understanding of the above, the results of this study illustrate that the Theory of Planned Behaviour (TPB), which is based on attitudes and behaviour, offers a useful framework for understanding compliance behaviour
This theory offers an accurate framework to predict compliance behaviour and combines it with the economic deterrent models espoused in this study
Summary
Business Registers hold a great deal of information, but the extent of the information depends on different legislations. By 2012 according to the Doing Business Report, 2015 (54) economies had introduced new technology in their company registration processes in the last seven years while Sub Saharan Africa was the region with the highest number of reforms (83) followed by East Asia and the Pacific (45). Because of the aforementioned and ease of company registrations, countries have recorded growth in company registrations but compliance levels in most Jurisdictions remain a big challenge. It could be argued that there is a positive correlation between ease of doing business with increase in company registration
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