Tax Compliance Costs and the Use of E-filing by SMMEs

Alexander Oluka () and Bomi Nomlala ()
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Alexander Oluka: University of KwaZulu-Natal
Bomi Nomlala: University of KwaZulu-Natal

The Journal of Accounting and Management, 2021, issue 2(11), 44-56

Abstract: This study investigated the costs associated with tax compliance for the small business taxpayer and the factors that motivate them to use the e-filing tax system in Ugu district municipality. Qualitative research method with semi-structured face-to-face interviews was used as a data collection technique. A thematic analysis was deemed a suitable data analysis method. The findings revealed that the tax compliance costs incurred by taxpayers were mainly monetary cost (practitioner’s fees, lawyer’s fees and travel costs) and time costs (time spent travelling to the tax office, waiting in the queue to be served and preparing documents for tax submission). In addition, taxpayers have pointed out that ease of use of e-filing and demographic factors such as access to the internet and end-user computer knowledge are factors that influence the use of the e-filing tax system. The findings will be of value for the South African revenue services (SARS) and small businesses to become aware of the costs associated with tax compliance and educate them on the necessity of complying with tax law. Research recommends that SARS provides sub-stations or mobile units for rural taxpayers to access the e-filing system and provide the necessary training to the public.

Keywords: Taxpayer; Technology Acceptance Model (TAM); Value-Added Tax (VAT); Compliance Costs (search for similar items in EconPapers)
Date: 2021
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