Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 148

Full Length Research Paper

The influence of mental accounting, perceived trust and power of revenue authorities on tax compliance among SMEs in Zimbabwe

Marcus Mutanga
  • Marcus Mutanga
  • School of Business Leadership, Midlands State University, Zimbabwe.
  • Google Scholar
Nokuthula Ncube
  • Nokuthula Ncube
  • School of Business Leadership, Midlands State University, Zimbabwe.
  • Google Scholar
Eukael Nombuyiselo Mbuyisa
  • Eukael Nombuyiselo Mbuyisa
  • Entrepreneurship Department, Midlands State University, Zimbabwe.
  • Google Scholar
Prisca Magodhini
  • Prisca Magodhini
  • Business Management Department, Midlands State University, Zimbabwe.
  • Google Scholar


  •  Received: 30 July 2019
  •  Accepted: 30 December 2020
  •  Published: 30 April 2021

Abstract

This study is done against a background of perennial negative variances between the projected and actual tax collections in Zimbabwe. Studies that look at the influence of mental accounting, perceived trust and power of tax authorities on tax compliance seem to be lacking in Africa. The target population comprise of self-employed tax payers because these currently comprise the highest form of employment among Zimbabweans. Their compliance depends to some extent on their mental accounting practices, perceived trust and power of the tax authorities. The study objectives are therefore to i) examine the influence of mental accounting on tax compliance ii) examine the influence of trust in revenue authorities on tax compliance and iii) examine the influence of perceived authority of revenue officers on tax compliance. This study used mental accounting theory, slippery slope framework, perceived trust and perceived power of tax authorities to explain tax compliance behaviour among SME owners in Harare, Zimbabwe. A questionnaire is used as the data collection tool, with constructs adopted from some scholars. Self-employed tax payers registered under the Small to Medium Enterprises Association of Zimbabwe (SMEAZ).  Those which are based in Harare are selected using simple random selection method. The STATA software package is used to analysis data. The nature of relationships that exist among the variables under study are established and reported on. It is on the basis of these findings which include that there was a strong positive relationship between perceived trust in tax authorities and voluntary compliance that recommendations are made.

 

Key words: Mental accounting, mental accounting theory, slippery slope framework, perceived trust, perceived power of tax authorities, tax compliance, ZIMRA.