Abstract:
The main issue faced by all tax authorities in developing countries is securing sufficient
revenues to finance various governmental expenditures. Taxpayers who comply voluntarily
with the tax system are paramount contribution for state building. Hence, the main aim of
this study was to examine determinants that affect taxpayers’ voluntary compliance level.
The study used a cross-sectional survey design that employed a quantitative research
approach. In the current study dual-media surveys, paper based and online survey, were
implemented. Category “A” and “B” taxpayers were the target population of the current
study. Primary data obtained from 229 respondents were analyzed through descriptive and
econometrics methods. Given the ordered nature of the dependent variable, the study
employed an Ordinal Logistic Regression model. The result of this study revealed that tax
knowledge and perception of fairness have a significant and positive effect on voluntary tax
compliance. While, corruption, complexity of tax system and compliance costs have a
significant and negative effect on voluntary tax compliance level. Thus, tax authorities
before implementing any tax compliance strategies and policies, they should understand
clearly factors that motivate and deter taxpayers’ voluntary tax compliance level. So, to
achieve sustainable, efficient and cost effective high voluntary tax compliance level, tax
authorities should concentrate on fighting corruption, building easy and less costly tax
system, educating taxpayers about tax and improving the fairness of the tax system. In
addition, this paper contributes to the tax compliance literature on voluntary tax compliance
issues.