A tax compliance risk profile of guesthouse owners in Soweto, South Africa

Southern African Journal of Entrepreneurship and Small Business Management


 
 
Field Value
 
Title A tax compliance risk profile of guesthouse owners in Soweto, South Africa
 
Creator Bornman, Marina Ramutumbu, Pusheletso
 
Subject Accountancy; Taxation Tax compliance; guesthouse owners; tax knowledge; fairness perception; social norms; tax morale.
Description Background: A conceptual framework to assess the particular tax situation of small business owners identifies three key aspects that distinguish small business owners’ perceptions of their tax obligation. These aspects are: they are likely to perceive more opportunities not to comply than employed taxpayers; they are likely to lack meaningful taxation knowledge and they are likely to frame the paying of taxes as a loss.Aim: The aim of this article was to sketch a tax compliance risk profile of guest house owners in Soweto to suggest strategies to negate those factors that may negatively influence their compliance behaviour.Setting: Tax compliance is a priority for tax administrations, especially in developing countries such as South Africa where small businesses are a high compliance risk group. Small guest houses’ income is usually variable and/or cash-based and not easily verifiable against third-party data, which creates a high risk of non-compliance.Methods: A mixed methods research approach was followed. Empirical evidence in the form of semi-structured questionnaires administered face-to-face with 23 guest house owners in Soweto was statistically and thematically analysed to compile a profile of the tax compliance risk according to the framework for tax compliance behaviour of small business owners.Results: Factors such as age, gender and tax morale show favourable results for tax compliant behaviour. However, perceptions of fairness, perceived opportunity for non-compliance, knowledge deficits, decision frames, industry, business size and social norms embrace a high risk of non-compliance for this population.Conclusion: Information pointing out the factors that could negatively influence tax compliance behaviour in this population was obtained. Strategies for empowering small business owners to comply voluntarily with their tax obligations are suggested and include, for example, taxpayer education and improved communication efforts from the revenue authority.
 
Publisher AOSIS Publishing
 
Contributor
Date 2019-05-27
 
Type info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion — Survey Data and evidence from literature
Format text/html application/epub+zip application/xml application/pdf
Identifier 10.4102/sajesbm.v11i1.181
 
Source The Southern African Journal of Entrepreneurship and Small Business Management; Vol 11, No 1 (2019); 14 pages 2071-3185 2522-7343
 
Language eng
 
Relation https://sajesbm.co.za/index.php/sajesbm/article/view/181/284 https://sajesbm.co.za/index.php/sajesbm/article/view/181/283 https://sajesbm.co.za/index.php/sajesbm/article/view/181/285 https://sajesbm.co.za/index.php/sajesbm/article/view/181/277
 
Coverage Soweto, South Africa — Age, Gender, Tax Knowledge
Rights Copyright (c) 2019 Marina Bornman, Pusheletso Ramutumbu http://creativecommons.org/licenses/by/4.0