Factors Influencing Taxpayer Compliance Behaviour Among Small and Medium Enterprises: Evidence from the Clothing Sector in Lusaka, Zambia
DOI:
https://doi.org/10.59413/ajocs/v7.i3.2Keywords:
Tax compliance, Tax evasion, Cultural norms, Taxpayer education, SMEs, Perceived fairness, ZambiaAbstract
This study investigated the factors influencing taxpayer compliance behaviour among small and medium enterprises (SMEs) in the clothing sector in Lusaka, Zambia. The primary aim was to identify the roles of taxpayer education, perceived fairness of the tax system, and cultural norms in shaping compliance behaviours. Employing a mixed-methods research design, the study utilised both quantitative surveys and qualitative interviews to gather comprehensive data. A sample of 246 respondents, comprising SME owners in Lusaka's clothing sector, was selected through a combination of simple random and purposive sampling techniques. Data analysis included descriptive statistics, inferential statistics, and thematic analysis. Findings revealed that taxpayer education significantly enhanced compliance, with 70.1% of respondents aware of their tax obligations; however, over half (54.5%) had not attended formal education programmes. A substantial majority (74.4%) perceived current tax rates as unfair, indicating a need for tax policy reforms. Cultural norms also played a critical role, with 50.7% of respondents acknowledging their influence on compliance behaviour. Multiple regression analysis (R² = 0.645) confirmed that sociocultural norms, taxpayer education, and perceived fairness of the tax system collectively explain approximately 64.5% of variance in tax compliance behaviour. The study recommends targeted educational initiatives, transparency in tax administration, simplification of tax laws, and community engagement strategies to foster a culture of compliance among SMEs.
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