Abstract

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

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