Browsing by Author "Hamunyela, Theolida"

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    An investigation of factors influencing non-compliance with income tax by small and medium enterprises in Windhoek
    (University of Namibia, 2020) Hamunyela, Theolida; Indongo, Nelago
    The main objective of the study was to identify the major causes of tax non-compliance among SMEs in Windhoek and examine the extent to which various factors affect tax non-compliance. Based on the problem that was investigated, the research design was multiple survey in nature, using mixed research methods. The target population of this study consisted of SMEs in Windhoek and included the SMEs from the construction, catering, transport, auto mechanics and crafts. The Chi-square test and binary logistic regression were used to test the significance of the relationship and the extent of factors associated with tax non-compliance among SMEs respectively. A 5% level of significance was adopted in making the decision on significance. A p-value of 0.05 or less was considered to be statistically significant. The results of this study revealed that 51.4 % (36) of the SME entrepreneurs did not have a certificate of good standing and 34.3 % (24) had a certificate of good standing with the Ministry of Finance while 14.3 % indicated that they do not know whether they have certificate of good standing. Specifically, majority of SMEs which fail to submit tax returns on time are close corporations. Only 57.1% sole traders did not submit their tax returns. The results also showed that SMEs which fail to submit tax on time had been awarded only one tender. The results further indicated that 41.7% of SMEs that did not submit tax returns on time had at least 15 years of experience. The study concluded that tax non-compliance of SMEs was influenced by business form, years of experience a company had as well as contracts awarded. Therefore, the business form, companies' years of experience and contracts awarded significantly influence income tax non-compliance. The researcher recommends that tax systems should be aimed at reducing the costs associated with complying with tax laws. This should encourage more SMEs to comply because when taxpayers spend little or no money to comply, compliance should come naturally. To enhance compliance, there is need to intensify taxpayer education in terms of increasing the number of sessions and broadening coverage to include tax consultants