DETERMINANTS OF SMALL AND MEDIUM ENTERPRISE TAX COMPLIANCE IN FEDERAL CAPITAL TERRITORY, ABUJA

Authors

  • MUSA ADEIZA FAROUK ANAN University Kawali, Plateau State, Nigeria Author
  • BANJAMIN UYAGU ANAN University Kawali, Plateau State, Nigeria Author
  • RITA BASSEY NYONG ANAN University Kawali, Plateau State, Nigeria Author

Keywords:

Tax Compliance, Multiple Taxation, Small and Medium Enterprises, Economic Inefficiency, Tax Evasion.

Abstract

Determinants of small and medium enterprise tax compliance in FCT: cost, evasion and inefficiency. The research focuses on three independent variables increased cost of doing business, tax evasion, and economic inefficiency and their influence on the ability of SMEs to meet tax obligations. Using a logistic regression model, the study analyzes data from 171 SMEs to examine the relationship between these variables and their likelihood to comply with tax deadlines. The findings indicate that economic inefficiency caused by the complexity of multiple tax systems significantly effects on-time payment rates, with a positive relationship observed between inefficiency and timely compliance. Similarly, tax evasion was found to have a positive effect on compliance, suggesting that SMEs engaging in evasion practices are likely to meet tax deadlines. However, the cost of business, despite its increasing burden, was shown to have a positive influence on compliance, as SMEs may prioritize timely payment to avoid penalties and further complications. The study concludes that multiple taxation creates significant challenges for SMEs in Nigeria, resulting in non-compliance, tax evasion, and economic inefficiency. Policy recommendations include simplifying tax procedures, providing tax incentives, improving tax education, and reducing the administrative burden on SMEs to enhance compliance rates. These measures would not only improve tax compliance but also foster a more supportive environment for SME growth and development in Nigeria.

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Published

2025-10-01

How to Cite

MUSA, A. F., BANJAMIN, U., & RITA, B. N. (2025). DETERMINANTS OF SMALL AND MEDIUM ENTERPRISE TAX COMPLIANCE IN FEDERAL CAPITAL TERRITORY, ABUJA. ANUK College of Private Sector Accounting Journal, 2(2), 169-180. https://anukpsaj.com/psaj/article/view/128

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