An analysis of determinants of tax compliance by small and medium enterprise in Harare

Abstract

This research carried out an analysis of the determinants of tax compliance by Small and Medium Enterprises (SMEs) in the Magaba area, Harare. The main objectives of the study were to assess the level of tax compliance among SMEs in Harare and establish SMEs tax determinants that affect their level of compliance. The study used both qualitative and quantitative information. Primary data was collected through the use of questionnaires which were given to SMEs in the Magaba area, Harare to fill and through face to face interview with 4 owner SMEs who were randomly selected. The results indicated that the level of compliance among SMEs was very low. The study then concluded that most SMEs were not voluntarily willing to pay tax The study recommended that the tax authorities should make an effort to educate the SMEs about issues concerning tax. However the researcher also recommended that stiffer penalties should be given to those who evade paying tax. The area that is recommended for further study is the determination of how tax calculations should be simplified and redrafted to suit the ordinary laymen.