PERCEIVED DETERMINANTS OF TURNOVER TAX COMPLIANCE. DOES PATRIOTISM MATTER? A CASE OF DEVELOPING ECONOMIES
Abstract
Tax compliance is an important part of contemporary discourse regarding corporate taxation in the corporate sector. The topic of tax avoidance, which constitutes an ethical dilemma for businesses, has been a widespread concern in both industrialized and developing nations. The main problem of this study is to examine the effect of perceived enforcement power, tax fairness, tax complexity and tax knowledge on turnover tax compliance. This study examined the whether patriotism moderates the relationship. The paper adopted a survey research method, and 360 copies of the questionnaire were administered to the SMEs owners/managers in Eldoret Town, Kenya. The study found that there is a significant level of tax compliance among SMEs in Eldoret Town. The study also shows that the taxpayer’s perception of enforcement power, fairness, knowledge and complexity have a significant impact on turnover taxpayers’ willingness to pay taxes and this association is significantly influenced by the level of patriotism. Based on findings, the study recommends that tax authorities must improve the taxpayers’ knowledge, enhance tax collection mechanism and inculcate a sense of patriotism through programs, initiatives, and training on tax awareness.
Keywords: Turnover Tax, Compliance, Patriotism, Fairness, Enforcement, Knowledge
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