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Factors That Affect Tax Compliance among Small and Medium Enterprises (SMEs) in North Central Nigeria

Atawodi, Ojochogwu Winnie and Ojeka, Stephen (2012) Factors That Affect Tax Compliance among Small and Medium Enterprises (SMEs) in North Central Nigeria. International Journal of Business and Management, 7 (12).

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Tax is an important stream of revenue for government’s development projects. However, tax compliance among SMEs is poor. Therefore, this study was conducted using SMEs in Zaria, North-Central Nigeria to evaluate and rank the factors that encourage non-compliance with tax obligation by SMEs. It was found that high tax rates and complex filing procedures are the most crucial factors causing non-compliance of SMEs. Other factors like multiple taxation and lack of proper enlightenment affect tax compliance among the SMEs surveyed only to a lesser extent. Therefore, it is recommended that SMEs should be levied lower percentage of taxes to allow enough funds for business development and better chances of survival in a competitive market. The government should also consider increasing tax incentives such as exemptions and tax holidays as these will not only encourage voluntary compliance but also attract investors who are potential viable tax payers in the future.

Item Type: Article
Uncontrolled Keywords: taxation, developing economy, tax compliance, tax compliance costs, informal economy, SMEs
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Mrs Hannah Akinwumi
Date Deposited: 27 Jun 2017 07:21
Last Modified: 27 Jun 2017 07:21

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