An explanation of the levels of compliance in filing company returns--theory of planned behavior approach:a case for Zambia

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Mweetwa, Chimuka
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The University of Zambia
Company registers are increasingly becoming a crucial source of business information for many stakeholders. While most company registers have concentrated on simplifying business registrations, reducing the number of procedures, time and cost for small entities to be formed, compliance remains a big challenge for many Company Registers. Compliance is not just influenced by economic variables of enforcement and penalties but should be understood in the context of behaviour as influenced by demographic, socio-economic and Institutional factors. The aim of this study was to identify and explain the factors influencing compliance behaviour in filing company annual returns based on the Theory of Planned Behaviour in Zambia. The study used a mixed research approach. A sample of 165 registered companies was randomly selected from the population of 68,049 active companies on the PACRA register. Nine PACRA officers were selected using judgment sampling and in-depth interviews were used. Primary data were collected through structured questionnaires. The secondary data were also collected by reviewing related published and unpublished materials. Statistical tests of independence (chi-square tests) formed the basis of analysis. The results of this study showed that annual return filings are influenced both by demographic and external factors. The demographic factors like employment status, Age and education were found to positively influence compliance. Further, compliance was highest (68%) among those with tertiary education compared with (47%) among those with no form of schooling. The study also revealed that those in formal employment were more compliant (64%) than those without employment (47%). Gender was found to be an insignificant factor and such it has no influence on compliance. On external factors, cultural norms, government policies and compliance fees were identified in the study and were found to have an influence on compliance (save for compliance fees). Finally, the findings of the study may guide government institutions that spend huge costs on enforcement year in year out but it is not so effective and that low penalty fees do not all the time cause voluntary compliance. Further, before Institutions implement costly sensitization campaigns and educational clinics, they need to understand variables that cause compliance behaviour. The study findings can help Policy makers and PACRA meeting its strategic goals of raising compliance levels which currently stand at 40% to about 70%. KEY WORDS: Compliance, Annual Returns, Company Register, Theory of Planned Behaviour, Demographic factors, external factors
Compliance--Annual Returns--Zambia , Company Register--Theory of planned behaviour