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Theses and dissertations (Accounting and Informatics)

Permanent URI for this collectionhttp://ir-dev.dut.ac.za/handle/10321/4

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Start date: 2021Subject: search.filters.subject.Taxpayer compliance

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    The impact of the iLembe District Municipality business incubation programme on the tax compliance of small and medium-sized enterprises
    (2023) Magwaza, Bahle; Stainbank, Lesley June; Jali, L F
    The purpose of the study was to investigate the impact of the iLembe District Municipality business incubation programme on the tax compliance of small and medium-sized entities (SMEs). The study used a positivist philosophy and an exploratory design. The target population was 1 005. A questionnaire was administered electronically to a sample of 278 SMEs. The findings highlight the varied range of support services that business incubators in South Africa provide to SMEs which are critical for their survival, growth, and longterm success. Factors affecting SMEs’ tax compliance were penalties, tax complexity, record keeping, and compliance costs for both incubated and non-incubated SMEs. Record keeping and documentation was perceived as the factor that most affects compliance amongst the businesses under incubation (m = 3.99), while tax penalties was perceived at the factor most affecting compliance for SMEs not in the incubator (m = 4.01). The findings also indicate that SMEs under incubation tend to hold more favourable attitudes towards the benefits of tax compliance compared to SMEs not under incubation. This finding highlights the significance of business incubators in increasing SMEs' tax compliance, resulting in a more tax compliant SME sector in the iLembe District Municipality The study recommends that business incubators ought to collaborate with the South African Revenue Service and other government agencies to develop policies that will enhance SMEs’ tax compliance in the iLembe Municipality District. It also recommends that business incubators hire service providers, consultants, or incubator staff who are knowledgeable and skilled in SME development, and particularly in tax compliance. Finally, the study highlights the critical role of business incubators in improving SMEs' tax compliance and overall success, emphasising the need for targeted support, education, and collaboration. Incubators play a critical role in the iLembe District Municipality's entrepreneurial landscape by providing comprehensive services and targeted efforts that not only assist tax compliance but also stimulate growth, innovation, and economic development.
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    The tax compliance burden in the functioning of small and medium-sized enterprises in the Durban Central Business District
    (2023-03-01) Buthelezi, Lungisani Lucky; Stainbank, Lesley June; Mutanda, Mary
    Several attempts have been made to examine the effect of tax compliance burden in the functioning of small and medium-sized enterprises (SMEs) but to date, tax compliance is still a constraint in the functioning of SMEs. The purpose of this research was to evaluate the tax compliance burden in the functioning of SMEs in the Durban Central Business District. The study examined the effect of tax compliance burden using a quantitative method, with data collected via questionnaires from SMEs and tax practitioners in the Durban Central Business District. The latest version of the Statistical Package for Social Sciences V1.0.0.1406 was used to analyse the results. The study found that SMEs and tax practitioners both agreed that the tax compliance burden has a significant impact on the failure, performance, and growth of SMEs. They also agreed that high tax rates encourage noncompliance with tax laws, leading to SMEs concealing profits and a significant number of SMEs remaining in the informal sector. The analysis revealed that almost all the SMEs had never received any tax training and that SMEs rely on the services of tax practitioners to be tax compliant. SMEs and tax practitioners agreed that being tax compliant benefits SMEs. Low tax rates, electronic filing and payment of taxes, and government payments to tax practitioners to provide free services to SMEs in tax filing and record keeping are all very important in lowering tax compliance costs, as is frequent tax education, with practical and simplified tax laws. These results demonstrate that tax compliance burden is a constraint in the functioning of SMEs. The study recommends that the South African Revenue Service assists SMEs in reducing their tax compliance burden by increasing tax education and tax incentives for SMEs, paying tax practitioners to provide free services to SMEs or by assigning a tax practitioner to an SME for its first five years of operations.
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    The relationship between tax knowledge and tax compliance : a survey of small and medium-sized enterprises in Durban
    (2022-02-10) Sithebe, Nompumelelo Precious; Stainbank, Lesley June; Ronald, Chanthal
    The self-assessment tax system has become a popular system in most developing and developed countries. It was introduced in South Africa in 2001 through SARS filing with the aim to improve the level of tax compliance and to increase tax collection by the South African Revenue Service (SARS). This system allows taxpayers to calculate and pay their own taxes without the intervention of tax officials. Appropriate enforcements include levying penalties and interest as provided by the law against non-compliant taxpayers. The study focuses on small and medium-sized enterprises (SMEs) in the Durban area. SMEs are key contributors to tax revenue and eventually to economic growth in South Africa. SMEs also play a critical role in creating job opportunities. This study examines the relationship between tax knowledge and tax compliance in the self-assessment system (SAS). A quantitative research methodology was applied. Questionnaires were issued to the SMEs registered in Durban. Data was collected through a survey resulting in 93 responses. The study found that the majority of the respondents were compliant; however, there is still more work to be done to improve the level of compliance. The use of tax practitioners and improvement in the tax knowledge through training and mentoring programs may assist in improving the level of tax compliance. The results also revealed that most taxpayers have good knowledge on taxpayer responsibilities and value-added tax (VAT) and poor knowledge on turnover tax and payroll taxes. Turnover tax is one of the incentives implemented by government to reduce the tax burden of SMEs. The reason for poor knowledge on turnover tax was that the majority of taxpayers are not aware that turnover tax exists. Poor knowledge on payroll taxes negatively affects the business operations as payroll taxes are withheld by employers from the gross salary to be paid to SARS. This results in an incorrect declaration on the EMP201 and income tax returns which creates unnecessary audits and imposition of penalties by SARS. The use of efiling is still an issue as some of taxpayers prefer to join the queues at a SARS branch to submit their returns instead of using efiling. Tax complexity was found to be a barrier to tax knowledge because of frequent changes to tax laws which requires taxpayers to update their knowledge frequently. It was recommended that to address the barriers to tax knowledge, public awareness campaigns by SARS on the importance of taxation, more use of social media platforms by SARS on the importance of taxation, and the introduction of tax education in secondary schools should be implemented. The study did not find a statistically significant relationships between the components of tax knowledge which were tested and tax compliance. However, it does indicate to tax administrators the relative importance of tax knowledge in assisting with the design of tax education programmes, simplifying tax systems and developing an understanding of taxpayers' behaviour.
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    An expanded tax model to improve tax compliance amongst micro-businesses
    (2021-11-03) Mkhwanazi, Sipho S.; Jali, Lulu Fortunate; Ronald, R.
    Taxation plays a significant role in any country’s economy, since countries depend on the tax revenues they collect to generate the resources they require to meet their expenditure needs. The contribution of micro-businesses in South Africa, both to society and to the economy, is such that they have the potential to reduce the high rates of unemployment, to reduce poverty and to help address inequality. However, these businesses are known to face challenges with regards to complying with their tax obligations. Therefore, in this study, the conceptual framework presented by Fischer’s Tax Compliance Model is explored and its limitations considered in order to find possible solutions to improve tax compliance amongst micro-businesses. The aim of this study was therefore to expand existing theoretical models to further understand tax compliance behavior amongst these micro-businesses. The study adopted a quantitative research approach and a questionnaire was randomly distributed to micro-businesses in the following areas of eThekwini: a suburban area (Durban North), a township area (Umlazi), a rural area (Umbumbulu) and the city centre of Durban. Of the selected sample of 392 micro businesses, only 242 micro-business owners completed the questionnaires despite an extension of time being granted. Three research assistants were employed to assist the researcher in the data collection. The analytic software (SPSS) Version 26.0 was used to analyze the data. Results include the presentation of biographical data of the respondents, along with factors selected for inclusion which would enable a deeper understanding to emerge of aspects needed to improve tax compliance amongst this group of taxpayers. The findings indicate that these business owners share many of the characteristics of other businesses in their tax compliance behavior, but also that there were specific additional factors which affected them as regards tax compliance particularly involving the three aspects selected as a focus by the researcher: registration for tax, keeping of accurate accounting records, and drawing up of financial statements. These findings enabled an expanded tax compliance model to be presented. The study therefore contributes to improving the understanding of tax compliance behavior amongst micro-businesses in eThekwini Municipality. It recommends that, in order to improve the level of tax compliance amongst this group, the South African Revenue Services (SARS) must find better ways of communicating with, and assisting, micro-business owners to register their businesses for tax and they must emphasize the importance of keeping accurate accounting records, along with the need to prepare accurate financial statements for their businesses.
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    Taxpayer behavioural factors influencing entrenched tax gaps
    (2021-10-20) Reddy, Divakaran; Olugbara, Oludayo O.; Moodley, Asogan
    Tax compliance is the willingness of taxpayers to obey tax rules of a nation, whilst tax noncompliance is the unwilling behaviour of citizens to act under tax regulations. Taxpayer compliance enables the government to collect tax revenues, which is one of the most important sources of government income. Altering the non-compliant behaviour of citizens is an important barometer for increasing tax revenues that contribute to the socio-economic development of a nation. Numerous quondam studies have been conducted strikingly in the past few decades on taxpayer compliance. However, there is a dearth of sufficient research currently on tax noncompliance behaviour. Moreover, the phenomenon of tax noncompliance has limited exploration from the vantage point of meta-analysis of primary research studies conducted, focussing on interrogating, and systematically categorising their results. Resultantly, the purpose of this study was to examine the previously related primary studies to determine those factors that have been judged to have influenced the tax compliance behaviour of citizens. This study has adopted the quantitative research approach and followed the preferred reporting items for systematic review (PRISMA) method and meta-analysis to provide an accurate estimate of the relationship that exists in a population of relevant tax noncompliance behavioural studies. The population comprised of 45 international studies conducted between the period 2015 to 2020 is selected for analysis. The study results indicate that the quality of tax administration systems and public trust in institutional governance are factors that have influenced taxpayer compliance positively. Poor government accountability mechanisms entrenched tax gaps, and developing public trust in government institutions were found to be universal to promote voluntary taxpayer compliance. This study has contributed significantly to the open discussion on tax compliance among researchers, governments, and businesses.