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The Role of Income Tax System Structure in Tax Non-Compliance Behaviour Among SMEs in Yemen

Al-Ttaffi, Lutfi Hassen Ali and Abdul-Jabbar, Hijattulah and Nashwan, Saeed Awadh (2021) The Role of Income Tax System Structure in Tax Non-Compliance Behaviour Among SMEs in Yemen. International Journal of Banking and Finance (IJBF), 16 (2). pp. 23-49. ISSN 2590-423X

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Tax is the main source of government revenue. However, a number of countries worldwide are increasingly besieged by challenges regarding compliance levels with the rules of tax systems. Thus, this paper aims to enhance an understanding of tax non-compliance behaviour by investigating the effect of the income tax system structure on Yemeni taxpayers’ behaviour. The study focuses on income tax compliance behaviour of owner-managers of small and medium enterprises (SMEs), as the Yemeni economy relies heavily on this sector. The SME sector represents 99.6 percent of business in Yemen. Based on a quantitative approach using a self-administered survey instrument, a total of 330 valid questionnaires were collected and the feedback provided analyzed. The results demonstrate that SME taxpayers exhibited a high level of tax non-compliance. Furthermore, the multiple regression analysis shows that the tax rate had a positive and significant influence on tax non-compliance behaviour, but the tax penalties rate did not. These results can be especially relevant to policymakers and practitioners of tax systems structures, particularly in a developing country such as Yemen.

Item Type: Article
Uncontrolled Keywords: tax non-compliance behaviour, tax system structure, SMEs, Yemen
Subjects: H Social Sciences > HG Finance
Divisions: School of Economics, Finance & Banking
Depositing User: Mrs Nurin Jazlina Hamid
Date Deposited: 05 Mar 2023 08:38
Last Modified: 17 May 2023 15:06

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