EFFECT OF TAX COMPLEXITY ON TAX COMPLIANCE OF SMALL AND MEDIUM SCALE ENTERPRISES IN BAYELSA STATE
Eneh, Onyinye M.
Department of Accountancy
Nnamdi Azikiwe University, Awka
Mail: o.eneh@unizik.edu.ng
Onwuchekwa, John Chika
Department of Accountancy
Federal University, Otuoke,
Bayesa State
Okoye, Nonso
Department of Banking and Finance
Nnamdi Azikiwe University, Awka
Abstract
This study was conducted to look into small and medium-sized businesses’ tax compliance and complexity in Bayelsa State, Nigeria. The research looked at three different areas of complexity: tax simplicity, tax service quality, and tax penalties. The exploratory research design was used in this study. The study’s target sample consisted of 228 Bayelsa State small and medium enterprises that are registered with the Bayelsa State Board of Internal Revenue. The study relied on primary data collected using a well-structured questionnaire. Confirmatory factor analysis was used to look into the validity of the components in the proposed research model, and a pretesting approach was used to look into content validity. The Cronbach Alpha test statistic was used to assess the questionnaire’s consistency and reliability. Finally, the overall model fit was tested using a structural equation modeling (SEM) technique. The five indices used to assess idea validity were the goodness-of-fit index (GFI), Tucker–Lewis index (TLI), root mean square residual (RMR), and χ2 /degree of freedom (χ2 /df). The researchers used Stata 13 to estimate the structural equations model (SEM). The study’s findings indicated that tax simplicity and service quality had a bigger impact on tax compliance than tax penalties. As a result, the research advises that any bottlenecks and complexity in the tax system be removed in order to make it simpler for SMEs to comply willingly. In addition, tax penalties should be increased, and tax authorities should guarantee that offenders comply with the required demands through the specified channels.
Keywords: Tax compliance, Tax complexity, SEM
JEL CODE: H2, C4
Eneh, O.M; Onwuchwka, J.C & Okoye, N. (2022). Effect of Tax Complexity on Tax Compliance of Small and Medium Scale Enterprises in Bayelsa State. International Journal of Advanced Academic Research, 8(2), 72-89. Available online at: https://www.ijaar.org/articles/v8n2/sms/ijaar-v8n2-Feb22-p8225.pdf
