An investigation into the factors affecting timely remittance of tax returns in Lusaka: a case of Chachacha and Freedom way block.
Mulenga, Chiti Nancy
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Tax is a highly topical subject in academic research. Complexities relating to compliance behavior and the dynamics around the relationship between taxpayers and authorities contribute to the interest in the subject. The objective of this study was to add to the literature in this area by exploring the factors behind timely remittance of tax returns by businesses in Lusaka. The purpose was to conduct a mixed methods case study of the factors affecting timely remittance of tax returns amongst small business in Lusaka’s Chachacha-Freedom Way Tax Block. Data was, collected from a purposive sample of 159 small business owners/managers in the Chachacha and Freedom Way Block in Lusaka, Zambia. A self-administered questionnaire containing both close and open-ended questions was the tool used for data collection. Categorical data was, analyzed by simple frequencies using SPSS Version 26. Qualitative textual data was, analyzed manually using hierarchical coding frames. Quantitative Likert scale data was, used to estimate PROBIT empirical models to investigate how factors such as perceptions of administrative simplicity, economic efficiency, equity, flexibility, certainty, and political responsibility around the fiscus affect the probability of timely remittance of returns. Results of the study are that experiential issues were some of the reasons affecting taxpayers that could be, analyzed in terms of the conduct of their businesses, interaction with tax authorities and information flows between them. Factors for delayed remittance of tax returns included non-adoption of e-filing methods and perceptions of political responsibility or otherwise behind the tax system and fiscus. In regards the latter, the study therefore finds some evidence for Political legitimacy theory of tax compliance. Both the quantitative and qualitative analyses conducted generally supported the idea that perceptions of economic efficiency, administrative simplicity, equity, flexibility, certainty, as well as political responsibility generally contribute to timely remittance of tax returns. Recommendations of the study include promotion and easing of user friendliness of e-filing methods as well as raise the ethical profile of the authority and strengthen taxpayer belief in the value of paying taxes by strategic partnerships with tax funded government operations to improve political legitimacy. Key Words: Tax Compliance, Tax Returns, Political Legitimacy Theory, Probit Model
The University of Zambia