The Effects of E-Services on Revenue Collection and Tax Compliance among SMEs in Developing Countries: A Case Study of Zambia

Abstract

World over, taxpayers' resistance, underutilization and reluctance to use e-services remain a great concern and still plague various tax agencies which are embracing electronic tax services. This study set out to investigate the effects of these electronic services on revenue collection and tax compliance among Small and Medium Enterprises in urban Zambia. The study also sought to identify factors that influence the acceptance and use of electronic services among SMEs using the Unified Theory of Acceptance and Use of Technology (UTAUT) Model. The study employed a descriptive research design where 400 questionnaires were administered to purposively sampled SMEs in the Copper belt and Lusaka provinces. The data collected was analyzed using the social package for statistical sciences software (SPSS) descriptive and correlation analysis. The descriptive analysis revealed that there has been a significant increase in revenue collection and tax compliance among SMEs since the introduction of these e-services. This was validated by results from correlation analysis which gave a correlation coefficient of 0.157 and a p-value of 0.017, which was deemed to be statistically significant because it gave a p-value less than 0.05. The study also shows that Performance Expectancy, Effort Expectancy and Social Influence affect SMEs' behavioral intention to use eservices. Further, only Behavioral Intentions of SMEs significantly affect their use behavior of e-services.

Factors that Affect SMEs in the Adoption of E-Tax Payment Systems in Zambia, the Case of Kamwala Trading Area-Based on UTAUT Model

“…This means that there is a statistical positive relationship between the actual usage and effort expectancy at 0.05 (5 percent) level of significance. The result was contrary with the findings of Mukuwa and Phiri (2020) and Schaupp and Carter (2009) despite using the TAM model.…”

“…However, results revealed that there are few taxpayers who still felt that E-tax is not useful, easy to use and secure. Similarly, Mukuwa and Phiri (2020) showed that Performance Expectancy, Effort Expectancy and Social Influence affect SMEs' behavioral intention to use eservices. Further, only Behavioral Intentions of SMEs significantly affect their use behavior of e-services.…”

Factors Influencing the Adoption of E-Services by the Informal Sector: A Case of ECIS under NAPSA

“…UTAUT formulation is based on eight research models, namely, technology acceptance model, theory of reasoned action, hybrid model TAM-TPB, motivational model, theory of planned behavior, model of PC utilization, innovation diffusion theory and social cognitive JRIM theory. Detailed analysis of these eight models revealed that performance expectancy, effort expectancy, social influence and facilitating condition as primary determinants of behavior intention and ultimate usage of the system had significant influence on user intention to adopt technology (Samar Mukuwa & Phiri, 2020).…”

“…The business ICT system provides abundant advantages to customers, however, there is still an absence of trust among some customers. Absence of face-to-face interaction makes it very impersonal (Mukuwa & Phiri, 2020). Thus, customers are more comfortable dealing with people in a physical office setting that provides personalized services as opposed to mechanical interaction.…”

Analysis of the correlation between ICT and Tax Revenue in Indonesia

“…Several research that have done relates to the use of ICT (through the application of electronic taxation), and the results always stated that it has a positive impact on tax compliance and revenue of a country, including the use of the online tax system in Kenya (Wasao, 2014), the use of electronic sales registration machines (ESRM) (Ali et al, 2017) and utilization of electronic sales registration machine (Mascagni et al, 2021) in Ethiopia, the use of electronic tax system in the Republic of Turkey (Allahverdi et al, 2017) and the use of electronic taxation system in Uganda (Night & Bananuka, 2020). In Zambia, electronic tax services for Small and Medium Enterprises (SMEs) has increase its tax revenue and tax compliance (Mukuwa & Phiri, 2019), tax revenues from large taxpayers in Tanzania also increase due to the use of the e-tax system (Masunga et al, 2020). In addition, the electronic tax system in Nigeria were significantly reduce tax evasion (Otekunrin et al, 2021).…”