Electronic tax systems and tax compliance of small and medium enterprises (SMEs) in Uganda, a case of the selected SMEs in Kampala central business district (CBD)

Abstract

The study was about electronic tax systems and tax compliance of Small and Medium Enterprises (SMEs) in Uganda; a case of the selected SMEs in Kampala Central Business District (CBD). The study focused on three specific objectives: To examine how electronic tax registration influences tax compliance among the selected SMEs in Kampala (CBD; to examine how electronic tax filing influence tax compliance among the selected SMEs in Kampala (CBD, and to examine how electronic tax payment influence tax compliance among the selected SMEs in Kampala Central Business District. A cross-sectional research design was used and both qualitative and quantitative approaches of data collection were employed. The study used a population of 144 individuals from the selected SMES in KCBD and a sample of 106 participants / respondents was determined using Neumann’s formula, but the study focused on 97 respondents who were interviewed and filled questionnaires for analysis. Data was analysed using both inferential and descriptive statistics such as Pearson correlation, regression analysis such as model summary, analysis of variance (ANOVA) and coefficients. The findings show a positive and significant correlation between electronic tax systems (e-tax registration, e-tax filing and e-tax payment and tax compliance (R=.745, P<0.005), indicating that the adoption of these systems enhances taxpayers' willingness and ability to comply with tax obligations. Electronic tax systems play a significant role in promoting tax compliance by simplifying processes, increasing transparency, and reducing opportunities for tax evasion. The study concluded that electronic tax registration serves as an effective mechanism for enhancing tax compliance among the chosen SMEs in the Kampala (CBD; electronic tax filing has played a crucial role in improving tax compliance among SMEs in KCBD; and electronic tax payment has significantly improved tax compliance among SMEs in KCBD by providing a more accessible, efficient, and transparent payment method. The study recommends that URA should conduct regular sensitization initiatives aimed at informing SMEs about the significance and advantages of e-tax registration. Comprehensive guidelines and user-friendly tutorials should be provided in both English and local dialects; the study also recommends that URA should increase awareness initiatives to inform SMEs about the advantages, processes, and security associated with electronic tax payment methods.