The Influence of Tax Knowledge on Taxpayer Compliance. Case Study of MSMES in Bindura · Electronic Theses and Dissertations

Author

Moyo, Brian

Title

The Influence of Tax Knowledge on Taxpayer Compliance. Case Study of MSMES in Bindura

Abstract

The purpose of the study was to determine the influence of MSMEs’ tax knowledge on
their filing compliance, payment compliance and also exploring the effects of tax
educational workshops on the tax compliance of MSMEs located in Bindura town.
Correlational research design with a population of 892 MSMEs and a sample size of
278 MSMEs was used in the study. The participants were chosen using simple random
sampling method. The study used questionnaires to gather information from MSMEs'
managers and owners about their knowledge of taxes, attendance at tax engagement
workshops, and compliance practices. Collected data was analysed using simple linear
bivariate regression as the inferential statistical method on the Statistical Package for
Social Science version 20. The findings of the study showed that most MSMEs had a
general degree of knowledge of taxes and majority of them attended tax education
workshops. Moreover, the research found a positive relationship between tax
knowledge and filing compliance, tax knowledge and payment compliance, tax
educational workshops and compliance. Study results suggested that providing tax
education workshops can be an effective way in improving tax compliance of MSMEs.
The study’s results highlight the importance of tax training and educational programs
for MSMEs in improving their understanding of tax regulations and their obligations.
The findings also suggest that tax authorities and other relevant stakeholders should
invest in providing regular tax education workshops to MSMEs to promote a culture of
being compliant. The study has several policy implications firstly, the tax authorities
should focus on developing and implementing effective tax education programs to
improve MSMEs’ tax compliance. Second, MSMEs must be encouraged to attend tax
education workshops in order to increase their knowledge and understanding of tax
regulations and finally policymakers should consider introducing tax incentives to
encourage MSMEs become compliant to tax laws and regulations. There is need for
cooperation between ZIMRA and MSMEs associations and unions in coming up with
a legal framework that grants such associations rights to withhold taxes when MSMEs
pay for their membership fees.

Date

2023

Publisher

BUSE

Keywords

Tax Knowledge

Taxpayer Compliance

Supervisor

N/A