The Influence of Tax Determinants on Tax Compliance Decisions by Small and Medium Enterprises (SMEs) in Harare CBD
Year: 2025
Type: article
Study design: Observational Study
Abstract: This research aimed to examine the factors influencing tax compliance decisions among Small and Medium Enterprises (SMEs) in Harare CBD. The objectives were to identify the determinants of tax compliance, understand the perceptions of SME operators regarding tax compliance, analyse the association between tax compliance determinants and behaviour, and propose tax procedures to encourage voluntary compliance for Zimbabwean small businesses. To achieve these objectives, a mixed-method research strategy was employed, collecting data from 128 participants through questionnaires and interviews. Descriptive and inferential statistical analysis tools were utilized, with data analysis conducted using MS Excel packages. The findings indicated that tax compliance determinants among SMEs in Harare CBD include tax morality, tax fairness, tax complexity/simplicity, availability of tax information, tax awareness, trust in authorities, and power in authorities. Furthermore, the study revealed that SMEs perceive tax compliance as crucial for their success and reputation, although it is seen as burdensome. Adhering to tax regulations can provide SMEs with a competitive advantage. The research also highlighted that the tax compliance behaviour of peers significantly influences individual SMEs, while the complexity of tax regulations hampers motivation to comply. Therefore, simplified processes and improved education initiatives are recommended. Policymakers and tax authorities are advised to promote tax morality, fairness, and transparency while regularly reviewing and updating regulations. Enhancing tax information availability and awareness initiatives are also suggested. SMEs and business associations should raise awareness about the importance of tax compliance and learn from the behaviour of compliant peers to create a positive compliance culture. Advocating for simplified tax regulations and improved education initiatives is crucial to alleviate the burden of tax compliance for SMEs. This research provides valuable insights into the determinants of tax compliance among SMEs in Harare CBD and offers recommendations for policymakers, tax authorities, and SMEs to improve compliance levels and alleviate challenges.
Authors: Caleb Magoba, Garikayi Mhishi, Andy Chiyangwa, Joseph Kusvabadika, Willard Magara, Gift Manhimanzi, Samuel Mwenje
Institution: Zimbabwe Ezekiel Guti University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4410114379