Tax compliance of small and medium enterprises: a developing country perspective

Abstract

Purpose The purpose of this paper is to establish the relationship between tax fairness, isomorphic forces, strategic responses and tax compliance in Ugandan small and medium enterprises (SMEs). Design/methodology/approach This is a correlational and cross-sectional study using two respondent types, the demand (represented by the tax collecting body respondents) and supply (represented by SME respondents) sides of tax compliance, to examine perceived tax compliance in Uganda’s SMEs. Findings Tax fairness, isomorphic forces and strategic responses have a predictive force on tax compliance. Significant mediation effects of tax fairness and also strategic responses are found. The two respondent types perceive the study variables differently – providing an understanding of why the tax compliance puzzle has remained a burgeoning concern. For example, the tax-collecting body respondents perceived more tax fairness than SME respondents, suggesting that perceived tax fairness depends on whose “lenses” you look through. Research limitations/implications Rather than focussing only on the importance of the rational analytical deliberation of tax fairness by taxpayers in influencing their tax compliance, the current paper shows that in addition, isomorphic forces and strategic responses establish the basis for understanding taxpayers’ compliance. Originality/value The methodology that enlists two respondent types, i.e. the supply side of tax compliance and the demand side of tax compliance, probably offers a unique way of deriving better results than previous studies.

Knowledge of Fraud and Taxpayer Compliance

“…Fair and comprehensive sanctions will also affect the taxpayer compliance in paying taxes. This is stated by Musimenta, Stephen, Brenda, Moses, and Irene (2017) in their research in Uganda that the enactment of the same law including fair sanctions will affect the taxpayer compliance in paying taxes.…”

Intergenerational Perception of Tax Audit and Voluntary Tax Compliance

“…Voluntary compliance needs responsive regulations where the taxpayers selfregulate their tax obligations with law consistently [48]. Tax compliance refers to the fulfillment of all tax obligations as determined by law freely and completely or the extent to which taxpayers comply with or fail to comply with state tax rules [49]; [48].…”

“…The indicators of tax audit probability consist of audit frequency (Brauns, PM, 2014; [12]), number of individuals examined [59], and inspection intensity [8], Audit target [12]. The indicators of the tax audit procedure consist of Transparent in the tax audit [59], the period of the tax audit [59], completion of tax audits [60], the effect of tax audits on business activities [49], and competence of tax officers [49]. The indicators of Tax Officer Behavior consist of tax officer interaction [51]; [15], pressure on individual taxpayers [51], and professional tax auditors [51].…”

“…It consists of questions about perceptions of tax audits and voluntary tax compliance where the questions about perceptions of tax audit are taken from questionnaire questions in several previous journal articles such as [51]; [8]; [62]; [59] and [12]. The questions about voluntary tax compliance are taken from the studies conducted by [63] and [49]. BA2 No pressure was felt during the income clarification process.…”

The Improvement of the Technique of Tax Risks Analysis and Assessment in Commercial Organizations

“…Другая группа ученых проводит параллель с контроллингом и взаимоувязывает внутренний контроль с информационным обеспечением управленческого учета [17]. В научной литературе также содержатся методы оценки эффективности внутреннего контроля, в том числе налоговых обязательств [18][19][20].…”