Determinants of tax evasion among small and medium enterprises in Windhoek
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Date
2021
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University of Namibia
Abstract
Today it is widely accepted that Small and Medium Enterprises (SMEs) are the essential
catalysts for the economic development of any country; however, researchers have a
growing concern on the determinants of tax evasion among SMEs. Using a mixed method
design, the study aimed to assess the determinants of tax evasion among SMEs in
Windhoek. A questionnaire was used to interview the respondents who own SMEs in
Windhoek. Data was entered and analysed in SPSS. Descriptive statistics and regression
were used to analyse the data. The study revealed that the economic determinants that
influence the tax evasion by SMEs in Windhoek are: penalties, perception on governn1ent
spending and fmancial constraints. Tax mentality and tax morale, perception on equity
and fairness of the tax system and attitudes of the taxpayer are the non-economic
determinants that influence tax evasion. The study found that age, marital status and
education has effects on tax evasion. In the study, the researcher also discovered that
taxpayers have a negative attitude towards taxation. The study recommends that
govermnent must give the consumer a proper subsidy under a competitive firm's market,
the consumer will voluntarily and fully declare unit tax so that the firm cannot cheat, and
that the cheating and auditing costs can be saved, thus Pareto improving and efficient
taxation without evasion becomes practicable. Government should understand the
nation's behaviour towards taxes and through the Ministry of Inland Revenue set up
strategies that would encourage and enable start up SMEs to pay tax
Description
A thesis submitted in partial fulfilment of the requirements for the Degree of Master of Business Administration Finance
Keywords
Taxation, Tax evasion, SME, Namibia, University of Namibia