Perception on Tax System Structure, Tax Compliance Costs and Tax Compliance Behaviour in Yemen

Authors

  • Mohammed Mahdi Obaid Faculty of Administrative Sciences, Seiyun University, Seiyun, Hadhramout, Yemen
  • Idawati Ibrahim Tunku Puteri Intan Safinaz, School of Accounting, Universiti Utara Malaysia, Sintok, Malaysia
  • Zakariya’u Gurama Faculty of Administrative Sciences, Seiyun University, Seiyun, Hadhramout, Yemen; Department of Accounting, Faculty of Arts and Social Sciences, Gombe State University Gombe, Nigeria

DOI:

https://doi.org/10.58915/ijbt.v12i3.974

Abstract

This study considered the tax system structure into tax penalty, tax rate, and tax audit, and then examined their effects on tax compliance behaviour among small and mediumsized enterprises (SMEs) in the manufacturing sector of Yemen. Also, the tax compliance cost in Yemen was considered as a mediating factor in the tax system structure and tax compliance model. The study used a survey questionnaire to collect data based on previous studies. The study empirically found a strong positive and significant association between the tax rate, tax penalty, and tax audit and manufacturing SME tax compliance behaviour in Yemen. Whereas tax compliance cost is negatively related to tax compliance behaviour. For the mediation effect, only the relationship between two factors, that is tax rate and tax penalty with tax compliance behaviour were mediated by of tax compliance costs. While no evidence for the mediating effect of tax compliance costs on the relationship between tax audit and the tax compliance behaviour is found. By referring to Deterrence Theory, this study has contributed by extending the tax literature through a framework that examined tax compliance cost as a mediator in the association between manufacturing SME tax compliance behavior in Yemen and the structure of the Yemeni tax system.

Keywords:

Deterrence Theory, SMEs, Tax Compliance Behaviour, Tax Compliance Costs

Downloads

Published

03-07-2024

How to Cite

Mohammed Mahdi Obaid, Idawati Ibrahim, & Zakariya’u Gurama. (2024). Perception on Tax System Structure, Tax Compliance Costs and Tax Compliance Behaviour in Yemen. International Journal of Business and Technopreneurship (IJBT), 12(3), 57–72. https://doi.org/10.58915/ijbt.v12i3.974

Issue

Section

Articles