Tax Compliance Research Articles

Tax Service Quality, Trust in Government and Tax Compliance among Small and Medium Enterprises in North Rift Economic Bloc

Purpose- The study sought to establish the indirect effect of trust in government on the relationship between the tax service quality and tax compliance among SMEs in North Rift Economic Bloc, Kenya.Design/Methodology- Based on the social contract theory, this study has a positivist philosophy that is informed by an explanatory research design. The target population was 21,232 SMEs; the sample size used in this study consisted of 393 SME owners/managers selected through a stratified sampling technique. Data were collected using a self-administered questionnaire, and Cronbach's alpha with factor analysis was used to establish the instrument's reliability and validity. Descriptive and inferential statistics were employed to test the hypothesis, and hierarchical regression using the Hayes Process macro was performed.Findings-The study revealed that tax service quality (β =.541, p=.000<0.05) and trust in government (β =.375, p=.000<0.05) are significantly positively related to tax compliance. In addition, the tax service quality was found to have a significant effect on trust in government (β =.395, p =.000<0.05). In addition, the results showed that trust in government mediates the relationship between tax service quality and tax compliance (β =.1482, CI=.0981, .2015).Practical Implications- These findings underscore the need for governments to improve the quality tax services, as this may be able to help in gaining public trust which will ultimately increase SMEs compliance with taxes. There is scope for future research to incorporate mixed-method approaches in order to discover yet more factors affecting tax compliance.

Effect of Court Suits on Value Added Tax Compliance Among Small and Medium Enterprises in Machakos Town, Kenya

Purpose: Value Added Tax non-compliance is an area of concern for all government and tax authorities and it continues to be an important issue that must be addressed. The general objective of the study was court suits on Value Added Tax compliance among the Small and Medium Enterprises in Machakos Town, Kenya. The study was guided by Agency theory and ability to pay theory. Methodology: The target population was 5412 Value Added Tax Registered Small and Medium Enterprises operators located in Machakos Town. The sample size was 372 Value Added Tax Registered Small and Medium Enterprises operators. Out of the 372 issued questionnaires only 275 were correctly filled and submitted in a timely fashion signifying a 73.9% response rate. The study employed explanatory study design. Primary data was collected using semi-structured questionnaires. The pilot study was done in Kitui town and the data analysis was both descriptive and inferential statistics. Descriptive statistics covered frequencies, mean, standard deviations and variances. Inferential statistics included Pearson’s correlation and regression analysis. Results: The study found that court suits significantly affected VAT compliance in a positive way β=0.261 p<0.05. Recommendation: The study recommends that taxpayers should be aware of the legal consequences of non-compliance, as court suits can drive adherence to VAT regulations

Effect of Perceived Usefulness of Digitized System on Rental Income Tax Compliance Among Landlords in Makadara Constituency, Nairobi County, Kenya

Purpose: Despite the tremendous growth in real estate, the corresponding tax collection from the sector has remained low. The contribution by rental income earners has been low despite all the efforts to enforce rental income tax policies. The study examined the perceived usefulness of digitized system on rental income tax compliance among landlords in Makadara Constituency, Nairobi County, Kenya. Methodology: It was guided by a unified theory of acceptance and use of technology the study adopted an explanatory research design. The target population was 4,927 landlords in Makadara Nairobi County. The sample size of the study was 369, and the study questionnaires that were correctly filled and returned were 230. The study used primary data which was collected using structured questionnaires with close-ended questions and a pilot test was conducted to test reliability and validity. Results: The study found that Perceived usefulness of digitized system and rental income tax compliance, β=0.261 p-value =0.000<0.05. Conclusion: Based on the findings the study recommends that the KRA should launch widespread campaigns to educate landlords about the usefulness of digitized systems. Future studies could be conducted to determine the impact of tax reforms on rental income tax compliance.

Determinants of tax compliance and their impact on a sustainable information society: an investigation of MSMEs

Determinants of tax compliance and their impact on a sustainable information society: an investigation of MSMEs

Dynamics of Perceptions among Self-Employed Business Owners on Tax Collection Models in Tanzania.

Tax compliance issues among self-employed business owners in Tanzania arise from complex and inequitable tax models, exacerbated by inconsistent enforcement and poor policy communication. This study investigates the dynamics of tax collection models in Tanzania, focusing on the perceptions of self-employed business owners across key regions, including Tanga, Dodoma, Arusha, and Mbeya. Drawing on findings from the TAPACO research project, the research employs a mixed-methods approach grounded in pragmatism a philosophy that emphasizes practical solutions. The sample size consists of 150 participants, with data gathered through structured questionnaires and semi-structured interviews representing various sectors within these regions. Entrepreneurial theories such as the Entrepreneurial Orientation (EO) Theory, Resource-Based View (RBV), and Theory of Entrepreneurial Alertness are utilized to frame the analysis of how self-employed business owners perceive tax estimates, bylaws, policies, the regulatory framework, and the tax collection environment. EO Theory explores how entrepreneurs’ risk-taking behaviors and reactivity to changes in the tax environment influence compliance decisions, The RBV examines how entrepreneurs strategically utilize their resources, particularly in making decisions about tax payments and investments in compliance technologies like Electronic Fiscal Devices (EFDs). The findings indicate that self-employed business owners in Tanzania face significant challenges with tax compliance, driven by inaccuracies in tax assessments, corruption within tax enforcement agencies, and a lack of training and infrastructure for adopting Electronic Fiscal Devices (EFDs). These factors, combined with poor communication of tax policies and regulations, have resulted in widespread non-compliance. The study concludes that effective tax compliance strategies must consider the entrepreneurial behaviors influenced by resource availability, risk tolerance, and alertness to regulatory changes. The study recommends strengthening anti-corruption frameworks within tax enforcement agencies, including regular audits, ethical training for task force members, and protections for whistleblowers. Transparency in tax collection operations is essential for rebuilding trust and encouraging voluntary compliance.

Understanding Tax Morale: A Critical Review of Its Impact on Compliance and Policy

This research aims to analyse tax morale’s effect on compliance, focusing on socioeconomic, cultural, and institutional influences, particularly in developing economies. We utilise a literature review to explore theoretical and empirical insights into tax morale and compliance, assessing the impact of trust, fairness, and governance. Key factors like government trust and fairness perceptions are identified as crucial to tax morale. We also highlight the role of corporate governance in shaping compliance strategies. This study enhances understandings of tax morale’s determinants and compliance implications, offering a theoretical framework for future research. As such, we recommend policy and educational measures to improve tax morale and compliance, emphasising the importance of trust and fairness. However, the review’s scope is limited to available literature, suggesting empirical research is needed to validate these findings further. Keywords: board of directors, determinants of tax morale, tax compliance, tax morale

The Impact of Nudge on Tax Compliance: A Study of Taxpayers in Lebanon

The Impact of Nudge on Tax Compliance: A Study of Taxpayers in Lebanon

Unclearly immoral: Low self-concept clarity increases moral disengagement.

This research examines the effect of self-concept clarity (i.e., having self-beliefs that are clearly and confidently defined, internally consistent, and stable) on moral behavior. Seven preregistered studies (N = 3,373) document that low (vs. high) self-concept clarity decreases moral behavior (e.g., donation, volunteering, tax compliance, honesty in an incentivized game). This effect occurs because low self-concept clarity increases moral disengagement, leading people to behave in morally questionable manners without damaging their self-concept. As evidence for this proposed underlying mechanism, we show that the effect of self-concept clarity on moral behavior is mediated by state moral disengagement and attenuates (a) among people with low trait moral disengagement, (b) among people with high trait moral identity internalization, and (c) in the presence of an honor pledge cueing moral engagement. We then show that the effect holds only when a prosocial act is congruent with personal values. Overall, these findings contribute to the literature on self-concept and moral self-regulation and have implications for how to promote morality and curb unethical behavior in society. (PsycInfo Database Record (c) 2024 APA, all rights reserved).

Analysis of research trends on tax morale in indexed journals in Indonesia

This study aims to analyze the research trends on tax morale in taxation journals indexed in Indonesia from 2019 to 2024. The method used is a systematic literature review by collecting data from various journals accredited by the Science and Technology Index (SINTA). The results show a significant increase in the number of publications discussing tax morale, especially in 2020, influenced by the COVID-19 pandemic. Factors such as trust in the government, social norms, and strict sanctions were found to have a positive impact on tax morale and tax compliance. The study also found that tax morale can be an effective tool for improving tax compliance through a holistic approach, including tax education, tax audits, sanctions, and incentives. This study provides important contributions to the taxation literature by presenting an in-depth analysis of tax morale research trends and their implications for tax policy in Indonesia. These findings are expected to help policymakers design more effective and sustainable taxation strategies.

Taxing High-Net-Worth Individuals: Recommendations from an African Perspective

In this article, the author considers how African countries can increase their tax base by taxing “high-net-worth individuals” (HNWIs), a small but growing segment of society that has the potential to contribute to revenue collection but is largely undertaxed. While the article sets out the justifications for African countries to focus on the taxation of HNWIs, it also notes that countries generally face various challenges in taxing HNWIs. To address the challenges, the article refers to some international guidelines that African countries can adopt in order to effectively tax HNWIs. With South Africa being the country on the continent with the highest number of HNWIs, the article focuses on the approach it has taken to tax HNWIs, in the hope that South Africa’s success story can be emulated by other African countries that face challenges in ensuring tax compliance by HNWIs.

Análisis Bibliométrico sobre la Auditoría Tributaria en Web of Science

The objective was to carry out a bibliometric analysis on the Tax Audit in Web of Science, 2024. 177 documents were analyzed with the following filters: keywords ("audit", "tax audit" and "taxation"), original open access articles, in English, Spanish and Portuguese between 2005-2024. VOSviewer was used to analyze categories of co-citations, co-occurrences and co-authorships. It is revealed that 98.3% of the articles are in English; Accounting Review stands out with about 463 citations and a total link strength of 21,110; the keywords "taxation" (53 mentions and 162 strong links) is the most popular; and England (56 documents) is the country with the highest production. It is concluded that research on Tax Audit tends to have increasing relevance in recent years and the phenomenon is related to tax policy and tax compliance. Finally, it is necessary to promote international collaborations and strengthen research production in less represented countries.

SIRE: Catalyst for Improvements in Accounting and Tax Processes

The Integrated Electronic Registration Systems have had a positive impact on the accounting and tax processes of SMEs. The article explored the impact of the Integrated Electronic Registration Systems| (SIRE, from the Spanish initials) on the accounting processes of SMEs in Peru, comparing it with practices in Ecuador and Colombia. For this purpose, 60 professionals participated in the study, which used a quantitative approach and the application of a survey and document analysis. The results of the study were analyzed quantitatively and qualitatively, thus examining how digitalization affects the efficiency and accuracy of accounting and tax processes. In terms of correlation results, there is a 63.10% correlation between SIRE and the accounting processes, while there is a 56% correlation between digital transformation and the accounting processes. Key lessons for policy makers and system designers were identified, emphasizing future reforms to facilitate an effective digital transition. This paper contributes to understanding how digitalization improves the economic performance and tax compliance of SMEs, providing a basis for future research and strategies aimed at integrating these companies into the digital economy.

AN ANALYSIS OF GST IMPLEMENTATION AND TRENDS IN REVENUE COLLECTION FROM 2017-18 TO 2023-24

India’s Goods and Services Tax (GST), implemented on July 1, 2017, revolutionized the country's indirect tax system by replacing a complex array of taxes with a unified consumption tax. This study analyzes the implementation, features, and trends of GST from fiscal year 2017-18 to 2023-24, utilizing secondary data from the Economic Survey of India 2023-24. The total GST revenue has shown significant growth, rising from ₹5,39,601 crores in 2017-18 to ₹15,18,127 crores in 2023-24. The GST structure operates under a dual system, with Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) being key components, alongside the Integrated Goods and Services Tax (IGST) for inter-state trade. High-contributing states like Maharashtra and Karnataka have strengthened their positions, while states like Himachal Pradesh and Uttarakhand face challenges. The analysis also reveals fluctuations in revenue due to the COVID-19 pandemic, with a robust recovery in subsequent years. Key findings underscore the need for targeted interventions in lower-performing regions, improvements in tax administration, and policy adjustments to address the declining share of cess. This research highlights the pivotal role of GST in enhancing tax compliance and broadening the tax base, laying the groundwork for sustainable economic growth in India. KEY WORDS: Goods and Services Tax (GST), Tax Compliance, Indirect Taxation, Economic Growth, Public Finance

Adverse Possession Laws: A Comparison Between Taxation Law and Property Law

This paper explores the intricate relationship between taxation and adverse possession, focusing on the implications for government revenue. Adverse possession allows individuals to claim legal title to property after continuous, open, and hostile occupation for a statutory period, while taxation ensures that property owners contribute to government finances through property taxes. The interaction of these legal frameworks presents challenges, particularly regarding unpaid taxes during the possession period and the responsibility of tax compliance. The potential for tax arrears, tax liens, and property sales to recover lost revenue are critical issues for governments seeking to maintain revenue stability. Additionally, the ambiguity surrounding taxpayer responsibility during adverse possession can lead to gaps in tax collection. This paper analyzes these challenges and highlights potential solutions, including legislative reforms requiring tax payments by adverse possessors and improved tax collection mechanisms to safeguard public revenue. By examining the overlap between adverse possession and taxation law, this paper aims to provide insights into preserving government revenue while addressing the complexities of land ownership transitions.

A Crucible of IoT Applications and Services and the Gambia Revenue Generation

The study investigated the relationship between Internet of Things (IoT) applications and services and The Gambia revenue generation, tax evasion and tax compliance respectively. It identified the challenges impeding the adoption and implementation of IoT applications and services in the revenue generation processes by the Gambia Revenue Authority (GRA). Both primary and secondary data were used in the study. Questionnaire and interview were used to generate the primary data. The study population (2188) comprised senior and mid-tier management personnel from the Ministry of Finance and Economic Affairs (MoFEA), staff members of The Gambia Revenue Authority, and the corporate taxpayers. The sampling approach used in this study was multistage. Personnel from the MoFEA and GRA were purposively selected, while corporate taxpayers were randomly selected. Their populations were then divided into various strata to ensure fair representation. Respondents were randomly picked from each stratum. To ensure an appropriate sample size, 327 individuals were selected. Data obtained were analysed using multiple regression, correlation coefficient, and simple regression analysis. Qualitative analyses were done on the interview responses. The study revealed that connectivity, networking, and data collection improve revenue generation, while increased IoT adoption and higher data utilisation and infrastructure investment reduce tax evasion and boost tax compliance. However, implementation of the IoT has encountered challenges in the form of technological barriers, financial constraints, and skill gaps. In view of these, investment must be made in enhancing connectivity and networking infrastructure, training staff in data analytics and cyber-security to optimise IoT data usage and boost IoT adoption through inducements and awareness programs. The study concluded that IOT applications and services are in the right direction to revolutionise The Gambia revenue generation.

The Influence of Tax Understanding and Income Tax Incentives on MSME Tax Compliance, Moderated by Tax Digitalization

The Influence of Tax Understanding and Income Tax Incentives on MSME Tax Compliance, Moderated by Tax Digitalization

Socio- Psychological Determinants, Compliance Cost and Value Added Tax Compliance

Socio- Psychological Determinants, Compliance Cost and Value Added Tax Compliance

Nudging for Tax Compliance: a Meta-Analysis

Nudging for Tax Compliance: a Meta-Analysis

Analysis of Tax Compliance Intentions amongst Small Business Owners in Kathmandu Valley: An application of the Theory of Planned Behavior

Governments heavily rely on tax revenue, imposing taxes on incomes, assets, and products of individuals and entities. However, tax compliance remains a global challenge due to complexities, systemic flaws, and taxpayer ignorance. In Nepal, particularly among small business owners, there is a lack of research on tax compliance intentions. This study aims to understand taxpayers' intentions regarding tax compliance, focusing on small business owners in Kathmandu Valley. The Theory of Planned Behavior (TPB) was employed to measure intentions using structured questionnaires and structural equation modeling (SEM) with SPSS and AMOS software. The study surveyed 200 small business owners, revealing that only 48.38% were aware of their tax compliance intentions. Additionally, 61.5% reported difficulties in paying taxes and criticized the government for insufficient tax awareness initiatives. Despite this, 74.74% believed that staying updated with changing government regulations could help manage tax challenges. The SEM results showed significant correlations between tax compliance intentions and factors like tax morale, tax complexity, and trust in the government. Most small businesses were registered and filed taxes annually, yet their compliance intentions were largely influenced by fear of fines. Furthermore, variables such as attitudes toward paying and avoiding taxes, belief in government, and the complexity of tax procedures also impacted compliance. The study concludes that improving tax services, enforcing more effective penalties, enhancing tax morale, and ensuring information transparency are crucial to facilitating tax compliance among small business owners in Nepal.

A global assemblage of tax haven clusters: profit shifting, tax dodging and money laundering

In this paper we explore a selection of tax haven clusters in the US and Europe as diverse but recognisable species of some fifty of the phenomena worldwide that have been seldom studied from an economic geography or spatial planning viewpoint. We treat the objects of study as being almost perfect expressions of the classical, canonical cluster configuration. They are: spatial agglomeration, untraded as well as market dependencies, small and medium-sized enterprise status, associative or agentic relationships, interaction with large firms inside or outside the cluster and knowledge acquisition, advisory, consultancy and knowledge translation services from research and innovation intermediaries - public and/or private. However, we think their characteristics demand further recognition of the interactive and often innovative communication networks by means of which these cluster incumbents interact globally. This is because they are set within a worldwide system that can be conceptualised as an exemplar of the well-known construct known as an ‘assemblage’ (Deleuze and Guattari, 2004a). Unlike more recent treatments from De Landa (2019) and others, we try to concentrate on the motive power of the ‘agentic’ impulses of ‘desire’ that motivate human action (e.g. regarding ‘God, Gold or Glory’ as commonly-rehearsed motivators for colonialism of various kinds). It has been more common to use ‘assemblage theory’ to analyse the interlocking ‘machinic’ elements of complex systems like power networks or laboratory interactions. To unlock the mysteries of system interlocking in our selected tax havens, which comprise Wilmington, Delaware (US), Ireland (EU) and Gibraltar (former EU, now British Overseas Territory) – post-Brexit - occupying a ‘quantum’ space ‘in which both the colonial and post-colonial find expression’ (Perera, 2021). Methodologically, we seek ‘pattern recognition’ to identify the lineaments that explain these clusters and the ‘agentic’ actors that motivate them.