This paper aims to establish the major determinants of tax non-compliance among SMEs in the Zimbabwean economy. Small and medium-scale enterprises (SMEs) are recognized globally for being the backbone of the economy through economic advancement, innovation, wealth generation, and further growth. SMEs have a high tax non-compliance rate, which hinders the development brought to many economies.
The survey research design was used, and the SMEs operating in
Bulawayo province were considered the sample of the study. The stratified
random sampling technique was adopted for eliciting information, and
questionnaires were administered to collect data from the respondents. 187
questionnaires were issued, and 153 were returned. Regression analysis was used
to establish the relationship between tax non-compliance and the predictive
variables using SPSS version 22. Three main models of tax compliance were
reviewed in the literature, and strong evidence of tax compliance determinants
was provided.
The study revealed poor follow-up strategy, lack of a tax audit,
high tax rates, financial constraints, abuse of public funds by authorities,
and tax education as the major determinants. SME operators should apply modern
business survival strategies to counter financial limitations. ZIMRA should
maintain a database for SMEs for tax audit purposes, intensify follow-up
strategies, increase tax audits, and increase tax support services for SMEs.
The government should consider reducing tax rates, which are perceived to be
too high, as they promote tax evasion and failure among SMEs. Massive campaigns
against evasion and avoidance of tax and intensive tax education should be
embarked on
Author
(s) Details
Banele Dlamini
Department of Accounting and Finance, Lupane State University, Zimbabwe.
Please see the book here:- https://doi.org/10.9734/bpi/nabme/v5/7805
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