An Examination of the Effect of Mobile Tax Services on Tax Compliance Among SMEs in Zambia: A Case Study of Lusaka District

Abstract

Tax compliance in Zambia remains a significant challenge despite increasing annual revenue collections. The country’s tax-to-GDP ratio has remained between 16.6% and 18.8% from 2001 to 2022, falling short of the 20% target set in the National Development Plan. To improve compliance and efficiency, the Zambia Revenue Authority introduced modernization initiatives such as Tax Online (2013), electronic payments (2014), and Tax on App (2020). Despite these efforts, mobile tax services remain underutilized, particularly among small and medium enterprises (SMEs), limiting their potential impact on tax compliance. This study examined the effect of mobile tax services on tax compliance among SMEs in Lusaka District, with specific focus on mobile tax services, mobile tax knowledge, and perceived benefits. The study adopted a quantitative approach using a descriptive research design. Primary data was collected through structured questionnaires from a sample of 150 respondents, achieving a response rate of 84%. Purposive sampling was used to select respondents who were registered users of mobile tax services, as they possess relevant knowledge and experience. Data was coded and analyzed using the Statistical Package for Social Sciences (SPSS) version 26, employing both descriptive and inferential statistics, including chi-square tests and regression analysis. The results revealed a statistically significant relationship between mobile tax services and tax compliance (χ² = 68.222, p < 0.001). Regression findings further showed that mobile tax services and mobile tax knowledge are significant predictors of tax compliance (p < 0.001), with the model explaining 20.8% of the variation (R² = 0.208), indicating a moderate positive relationship. The findings also revealed that most respondents frequently access tax information and are able to file tax returns using mobile tax platforms. The study concludes that enhancing taxpayer knowledge and improving system reliability are critical for strengthening tax compliance among SMEs. It recommends that the Zambia Revenue Authority intensify taxpayer education and awareness programs while ensuring continuous system availability. Future studies should adopt mixed-method approaches and expand the scope beyond Lusaka District to enhance generalizability.