FACTORS INFLUENCING SMEs VOLUNTARY TAX COMPLIANCE IN KADUNA

Abstract

This study investigated the factors influencing SMEs voluntary tax compliance in Kaduna State. This study developed a model of SMEs taxpayers, which is underpinned by the theories of deterrence and social exchange. This study extends the current literature by investigating the direct effect of audit, service quality and trust in authority on voluntary tax compliance as the variables in the study. The main objective of the study is to investigate the factors influencing SMEs voluntary tax compliance in Kaduna State. The study administered questionnaires to a sample of 382 SMEs taxpayers operating in Kaduna state of Nigeria. SPSS was used to test the directional hypotheses. This study found that service quality and trust in authority have significant direct effects on Voluntary tax compliance, while audit was found to be insignificant on voluntary tax compliance. The findings of this study provide important insights to the tax authority, policy-makers and future researchers in understanding voluntary tax compliance of SMEs taxpayers. To curtail tax non-compliance amongst SMEs taxpayers in Kaduna state Nigeria, the tax authority should improve on its audit system and make the information about detecting tax evaders public to serve as a warning to potential evaders, provide quality services to taxpayers and build public trust in terms of professionalism or system base, which will lead to voluntary tax compliance.