FACTORS AFFECTING VOLUNTARY TAX COMPLIANCE WITH A MODERATING ROLE OF TAX AWARENESS AND EDUCATION: EVIDENCE FROM IMPLEMENTED SERVICES TAX IN KHYBER PAKHTUNKHWA
DOI:
https://doi.org/10.5281/zenodo.10977786Keywords:
Tax Knowledge, Tax Compliance, Tax Awareness and Education; Sales Tax on Services.Abstract
This study investigates voluntary tax compliance in Khyber Pakhtunkhwa (KP), Pakistan, specifically looking at the Sales Tax on Services following the 2010 decentralization. The study investigates the impact of Tax Knowledge, on Tax Compliance with moderating role of Tax Awareness and Education by analyzing 440 KPRA-registered taxpayers with SPSS. This research aims to uncover factors that influence compliance in a location where legislation is always changing. The finding shows good insights for tax authority as well as for government the newly implemented service tax and their compliance. This research also shows the knowledge of taxpayer regarding digital tax system and their view of tax system knowledge and the potential for increase of services tax satisfaction level. Tax Knowledge show significant impact on tax compliance, and on the other hand Tax Awareness & Education also plays the moderating role. It Emphasizing the importance of tax knowledge and awareness, it proposes creative solutions to improve compliance in changing regulatory environments. The study output provides the services tax compliance in Khyber Pakhtunkhwa, it highlights the importance of tax knowledge and awareness and education in compliance. The result is valuable for tax authority in policy making and tax administration. This study emphasize the factors that are influencing tax compliance and the study also concluded the role of these factors in practical strategies for increasing tax compliance, and the contribution to the literature on tax compliance.
References
Masroor Ahmed Qureshi, “Pakistan Fiscal Policy Statement 2010-11,” Qureshi, Masroor Ahmed. “Pakistan Fiscal Policy Statement 2010-11” 1, No. 1 (2010): 35–36.
KPRA, “Khber Pakhtunkhwa Revenue Authority,” , 2020, www.kpra.kp.gov.pk.
KPRA, “KPRA-Report-2016-17.Pdf” (Khyber Pakhtunkhwa, 2017), www.kpra.kp.gov.pk.
Richard M. Bird, “The GST/HST: Creating an Integrated Sales Tax in a Federal Country,” SSRN Electronic Journal, no. January (2012): 11–12, https://doi.org/10.2139/ssrn.2115620.
Imran Shahzad, “Factors Influencing Taxpayer s ’ Behavior in Pakista n,” UCP Business school faculty of management studies university of central punjab, no. August 2020 (2020):29.
Awan & Hannan, “The Determinants of Tax Evasion in Pakistan-a Case Study of Southern Punjab,” International Journal of Development and Economic Sustainability 2, no.4 (2014):50–51.
Khyber Pakhtunkhwa Revenue , “KPRA-Report-2016-17.Pdf.”
Imran Shahzad, “Factors Influencing Taxpayer's Behavior in Pakistan,” UCP Business School Faculty of Management Studies University of Central Punjab, no. August 2020 (2020): 29.”
KPRA, “KPRA-Report-2016-17.Pdf.”
Ann Kayis-Kumar, “Taxing Multinationals: Preventing Tax Base Erosion through the Reform of Cross-Border Intercompany Deductions Title: Taxing Multinationals: Preventing Tax Base Erosion through the Reform of Cross-Border Intercompany Deductions,” 2017, 1–368.
Wollela Yesegat, “Value Added Tax in Ethiopia : A Study of Operating Costs and Compliance,” International Journal of Business and Management 3, no. 4 (2009): 419.
James Alm, “What Motivates Tax Compliance?,” Journal of Economic Surveys 33, no.2 (2019):353-56.
Hao Wu, “Estimating Net Effects of Tax System Complexity in Australia,” A Thesis in Fulfilment of the Requirement for the Degree of Master of Philosophy, School of Taxation and Business Law Australian School of Business, 2014, 124.
Andrew M.C. Smith, Ainul Islam, and M. Moniruzzaman, “Consumption Taxes in Developing Countries - The Case of the Bangladesh VAT,” SSRN Electronic Journal, no. 82 (2012): 4–5, https://doi.org/10.2139/ssrn.2028663.
Adesina Olugoke Oladipupo and Uyioghosa Obazee, “Tax Knowledge, Penalties and Tax Compliance in Small and Medium Scale Enterprises in Nigeria,” IBusiness 08, no. 01 (2016):6.
Martin Jacob, Roni Michaely, and Maximilian A. Müller, Consumption Taxes and Corporate Investment, Review of Financial Studies, vol. 32, 2019, https://doi.org/10.1093/rfs/hhy132.
Omondi Judith Adhiambo, "Factors Affecting Tax Compliance Among Small Scale Traders In" (unpublished thesis, 2019), 10.
Chepkurui Chebusit et al., “Factors Affecting Tax Compliance Among Small and Medium Enterprises in Kitale,” International Journal of Recent Research in Commerce Economics and Management (IJRRCEM) 1, no. 3 (2014): 67.
Harrison Mwangi Muturi, “Effects of Online Tax System on Tax Compliance among Small Taxpayers in Meru County , Kenya.,” Intermational Journal of Economics, Commerce and Management III, no. 12 (2015): 286.
Muhammad Akram, “The Way To Tax Compliance From Tax Evasion,” Thesis Submitted to The Superior College, Lahore in Partial Fulfillment of the Requirement for the Degree of Doctor of Philosophy in Business Administration, no. April 2018 (2018): 315.
Lars P. Feld and Bruno S. Frey, “Tax Evasion in Switzerland: The Roles of Deterrence and Tax Morale,” SSRN Electronic Journal, no. 284 (2011): 2, https://doi.org/10.2139/ssrn.900351.
adhiambo, “Factors Affecting Tax Compliance Among Small Scale Traders In.”
Muhammad Shaukat Malik and Sabah Younus, “Determinants of Tax-Compliance Behaviour Explored by Slippery Slope Framework and Theory of Planned Behaviour: An Evidence from Small Business Owner,” Journal of Management Sciences 6, no.2 (2019):33–47, https://doi.org/10.20547/jms.2014.1906203.
KPRA, “Khber Pakhtunkhwa Revenue Authority.”
Akram, “The Way To Tax Compliance From Tax Evasion.” Muhammad Akram, “The Way To Tax Compliance From Tax Evasion” (PhD diss., The Superior College, Lahore, April 2018), 315
Nurlis and Meiliyah Ariani, “Tax Awareness Moderates Knowledge and Modernization of Tax Administration on Tax Compliance, Survey on MSME Taxpayers in South Tangerang City, Indonesia,” International Journal of Management Studies and Social Science Research 2, no. 5 (2020): 252, www.ijmsssr.org.
Abhishek Mehrotra and Rosy Kalra, “Impact of Goods and Service Tax on Indian Economy,” TRANS Asian Journal of Marketing & Management Research (TAJMMR) 9, no. 2 (2020): 13, https://doi.org/10.5958/2279-0667.2020.00006.1.
Muhammad Akram, “The Way To Tax Compliance From Tax Evasion” (PhD diss., The Superior College, Lahore, April 2018), 315.
South Gondar Zone and Dejen Debeb Asmare, “Value Added Tax Administration and Its Challenges: The Case of South Gondar Zone, Ethiopia,” European Journal of Business and Management 12, no. 7 (2020):5, https://doi.org/10.7176/ejbm/12-7-01.
Hastuti, “Tax Awareness And Tax Education: A Perception Of Potential Taxpayers,” International Journal of Business, Economics and Law 5, no. 1 (2014): 9.
Mohd Rizal Palil, “Tax Knowledge and Tax Compliance Determinants in Self Assessment System in Malaysia,” (University of Birmingham, 2010), 1.438,
Occhiali, Giovanni, and Fredrick Kalyango. "Can Tax Agents Support Tax Compliance in Low-Income Countries? A Review of the Literature and some Preliminary Evidence from Uganda." (2021).
Tessya Adellia and Imas Nurani Islami, “Does Tax Awareness Moderate the Relationship of Tax Knowledge, Subjective and Personal Norms To Taxpayer Compliance?,” JIAFE (Jurnal Ilmiah Akuntansi Fakultas Ekonomi) 6, no. 1 (2020): 4, https://doi.org/10.34204/jiafe.v6i1.1916.
Nadiah Abd Hamid et al., “Taxpayer Perceptions of Tax Awareness, Tax Education, and Tax Complexity among Small and Medium Enterprises in Malaysia: A Quadrant Analysis Approach,” Universal Journal of Accounting and Finance 10, no. 1 (2022): 231–42, https://doi.org/10.13189/ujaf.2022.100124.
Shahnaz Noorul Amin et al., “Exploring the Influence of Tax Knowledge in Increasing Tax Compliance by Introducing Tax Education at Tertiary Level Institutions,” Open Journal of Accounting 11, no. 02 (2022): 61, https://doi.org/10.4236/ojacct.2022.112004.
The study of Nurlis and Ariani (2020)
(Nurlis and Ariani 2020; Adhiambo 2019)
Omondi Judith Adhiambo, "Factors Affecting Tax Compliance Among Small Scale Traders In" (unpublished thesis, 2019), 12.
Omondi Judith Adhiambo, "Factors Affecting Tax Compliance Among Small Scale Traders In" (unpublished thesis, 2019), 15.
Omondi Judith Adhiambo, "Factors Affecting Tax Compliance Among Small Scale Traders In" (unpublished thesis, 2019), 26.
Chebusit et al., “Factors Affecting Tax Compliance Among Small and Medium Enterprises in Kitale.”
Muturi, “Effects of Online Tax System on Tax Compliance among Small Taxpayers in Meru County , Kenya.”
Omondi Judith Adhiambo, "Factors Affecting Tax Compliance Among Small Scale Traders In" (unpublished thesis, 2019), 36.
Muturi, “Effects of Online Tax System on Tax Compliance among Small Taxpayers in Meru County , Kenya.”
Downloads
Published
How to Cite
License
Copyright (c) 2024 AL MISBAH RESEARCH JOURNAL
This work is licensed under a Creative Commons Attribution 4.0 International License.
AL-MISBAH Research Journal is full open access and licensed under Creative Commons Attribution 4.0 International License; and Published by: Research Institute of Culture & Ideology (REINCI), Islamabad, Pakistan. This allows the research community and the general public to gain unlimited, free and immediate access to scholarly articles, and to reuse the content freely provided that proper attribution is given to the original authors.
