Tax payers’ Attitude, Social Norms and Tax Compliance among small & medium enterprises in Arua district

Abstract

The purpose of the study was to examine the relationship between tax payers’ attitude, social norms, taxpayers’ intention and tax compliance among SMEs in Uganda. A cross sectional design was used. Data was gathered using a self-administered structured questionnaire. Respondents in SMEs from the various areas of Arua District filled the questionnaire. The respondents’ were 218 and data was analyzed using SPSS. The study revealed that tax payers’ intention is significantly positively related to tax compliance; there was a significant positive relationship between taxpayers’ attitude and taxpayers’ intention and also social norms and taxpayers’ intention were significantly positively related. The report concludes that taxpayers’ intention influences SMEs’ behavior to pay taxes. Indeed, intention was the main focus of the present study because previous studies on tax often neglected this variable as an important agent that could influence tax compliance behaviour. Taxpayers’ attitude in terms of behavioral beliefs and outcome evaluations affect the level of Compliance intention of SMEs where by a taxpayer with positive attitudes toward tax evasion is expected to be less compliant than a taxpayer with negative attitudes. Also social norms in terms of normative beliefs and motivation to comply affect the level of compliance intention of SMEs. This implied that if a person believes that the most important referents or individuals to him/her think that the behaviour should be performed, then he/she will perform that behaviour