Exploring the Influence of Turnover Tax Compliance on Financial Performance of Small and Medium Enterprises (SMES): A Case Study of Solwezi Central Business District, Zambia

Nikiwe Msoni and Lee Caleb Mahlungu
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Nikiwe Msoni: Cavendish University Zambia
Lee Caleb Mahlungu: Cavendish University Zambia

East African Finance Journal, 2025, vol. 4, issue 3

Abstract: This study explores the influence of Turnover Tax compliance on the financial performance of Small and Medium Enterprises in Solwezi Central Business District, Zambia. Data were collected through structured interviews with 20 SMEs in the retail sector. Findings reveal that although many SMEs are registered for turnover tax, challenges persist in timely filing and payment compliance due to limited knowledge, platform inefficiencies, and inadequate taxpayer education. Tax compliance affected performance differently depending on enterprise income patterns and seasonality. The study concludes that improving compliance and performance requires administrative reform, digital innovation, and capacity-building tailored to SMEs. It recommends aligning tax policy with SME realities, reducing compliance costs, strengthening incentives, curbing corruption, and improving accessibility of Zambia Revenue Authority services.

Keywords: Small and Medium Enterprises (SMEs); Zambia Revenue Authority (ZRA); Tax Compliance; Turnover tax; Financial Performance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:cwk:eafjke:2025-28

DOI: 10.59413/eafj/v4.i3.8

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