The Effects of Taxpayers Education and Tax Compliance on Small and Medium-Sized Enterprises in the Gambia

Ali Trawally & Nelson G. Obah-Akpowoghaha

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Abstract

Scholarly works on assessing the effect of taxpayers' education on tax compliance among SMEs in the Gambia have attracted less attention and studies. Available studies reveal the use of tax revenue in the public sector, but the issue of methods, tax education, and compliance are underdeveloped in the literature of public sector economy particularly in The Gambia, thus the need for this study. The study aimed at assessing the methods of taxpayers' education used by Gambia Revenue Authority (GRA) on SMEs, the effect of taxpayers' education on tax compliance among SMEs; identified the major contributing factors to non-compliance among SMEs and; investigated the challenges faced by GRA in educating taxpayers in the SME sector. The study population was 4,214 SMEs in Kanifing Municipality and 6 GRA employees in the Compliance and Taxpayers' Education Unit as at 2021. A total of 357 was used as the sample size using Taro Yamane formula. The study adopted a structured questionnaire instrument and an open-ended interview guide to collect data which aligned with the objectives. Data were analyzed using both descriptive and inferential statistics and the results were presented in the form of frequency distribution tables and graphs. In addition, the qualitative data collected through interview guide was content analysed whereby responses were categorised into themes and similarities supported by extant literature. The findings of the study revealed that there is a gap on tax education, tax compliance and SMEs in the Kanifing Municipality. This has affected the expected revenue of the GRA from SMEs in the KM. The study, therefore, recommended that the GRA should improve on its taxpayer education programme, by putting in place adequate and actionable policies and machinery to promote taxpayer education in order to better enlighten taxpayers and ultimately improve tax compliance and hence its internally generated revenue.

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