tax knowledge, taxpayers’ attitudes and tax compliance of small-scale enterprises in uganda

Description

Purpose – The purpose of this study is to establish the relationship between tax knowledge, attitude of tax payers and tax compliance in small scale enterprises in Uganda. Design/methodology/approach – the study adopted a cross-sectional design. Correlational designs were adopted to explain the relationships between the variables of study and the extent to which the independent variables explain the dependent variable. The study sample consisted of 384 small scale enterprises and data was collected from either the business managers or business owners. Small scale enterprises were considered for this study because of the fact that despite the efforts by URA, small business tax targeting Small Scale Enterprises still collects less than 4 billion Ugandan shillings yearly against a potential of 83 billion. The data was tested for reliability, analyzed using SPSS and results presented based on the study objectives Findings – The results from the study revealed that there is a significant and positive relationship between tax knowledge and attitude of taxpayers (r=0.272; p ≤ 0.01), tax knowledge and tax compliance (r = 0.366; p ≤ 0.01) and attitude of tax payers and tax compliance (r=0.282; p ≤ 0.01). The results further result a partial mediation role of taxpayers‟ attitude on the relationship between tax knowledge and tax compliance. Research limitations-Originality/value – The study considered only small scale taxpayers in Kampala. This limits the generalization of the findings to all businesses in Uganda. In addition, all the data used in the study was reported by the respondents ie it could not be verified. There could have been a level of biasness by the respondents while filling the questionnaires. Practical implications- On the basis of the findings, Uganda Revenue Authority (URA) needs to continue with the tax education practices that are already in place. There is need for URA to increase the levels of fairness and trust amongst the tax payers Keywords – tax, knowledge, attitude, taxpayers, compliance