Tax Compliance among Small and Micro Enterprises: A Case Study of Small and Microenterprises in Abuja, Nigeria.

Abstract

Purpose: The purpose of this study was to investigate the compliance of tax by among small and micro enterprises in Abuja, Nigeria. Methodology: The study utilized a descriptive survey research design utilizing quantitative and qualitative approaches. The target population to be selected was 540 TOT registered SME tax payers within the Abuja city central business district (CBD) dealing with Information Communication Technology products. The present study adopted a stratified random sampling technique to proportionately select a sample of 54 SMEs from the target population of 540 SMEs. Results: Tax compliance was strongly correlated with taxpayers’ attitudes (Pearson correlation coefficient = 0.595), tax payers understanding of the tax structure (Pearson correlation coefficient = 0.465), cost of compliance (Pearson correlation coefficient = 0.607) and audits & penalties (Pearson correlation coefficient = 0.609). Conclusion: There exist less tax compliance among small and micro enterprises in Abuja CBD due to less information about taxation and importance of paying taxes. Recommendation: The study recommended the government to increase civic education about taxation and importance of paying taxes in schools and colleges so as to foster tax compliant citizens. The study also recommended further research to be done on the implications of increased regional trade by SMEs on tax compliance.