Tax Compliance Behaviour of Small Scale Enterprises in Bassa Local Government Area of Kogi State

Abstract

The opaque in tax administration and enforcement makes tax compliance unduly burdensome and often have a distortionary effect on the development of small scale businesses as they are tempted to morph into forms that offer a lower tax burden or no tax burden at all. The study examined tax compliance behaviour of small scale enterprises in Bassa Local Government Area and assesses how taxpayers’ social psychological factors influence tax compliance level. Also, to establish how taxpayers’ demographical factors affect tax compliance level. The population of the study comprises of all registered small scale enterprises in Bassa local government area of Kogi State. While Krejcie and Morgan sampling technique was used to determine a sample size of one hundred and ninety seven (197) registered taxpayers. Statistical Package for Social Sciences (SPSS) version 17.0 software was used to analysed the data and the hypotheses were tested using one sample chi square. Result shows that taxpayers’ social psychological factors have significant influence on tax compliance level. Equally, taxpayers’ demographical factors have significant effect on compliance level. The study therefore, recommends that the tax authority should take tax education a routine responsibility, to enable the taxpayers’ to know the need to pay tax to the government. The tax authority should also increase the level of tax audit. There should also be a stiffer penalty on any taxpayer who is found wanting in sharp practices, to increase the level of compliance of taxpayers’ and reduce the disparity among all categories of taxpayers’.