Factors That Affect Tax Compliance among Small and Medium Enterprises (SMEs) in North Central Nigeria

Tax is an important stream of revenue for government’s development projects. However, tax compliance amongSMEs is poor. Therefore, this study was conducted using SMEs in Zaria, North-Central Nigeria to evaluate andrank the factors that encourage non-compliance with tax obligation by SMEs. It was found that high tax rates andcomplex filing procedures are the most crucial factors causing non-compliance of SMEs. Other factors likemultiple taxation and lack of proper enlightenment affect tax compliance among the SMEs surveyed only to alesser extent. Therefore, it is recommended that SMEs should be levied lower percentage of taxes to allowenough funds for business development and better chances of survival in a competitive market. The governmentshould also consider increasing tax incentives such as exemptions and tax holidays as these will not onlyencourage voluntary compliance but also attract investors who are potential viable tax payers in the future.