Tax Compliance Behavior Among Small and Medium Enterprises in Onitsha, Anambra State

This study examines the factors influencing tax compliance behavior among small and medium enterprises in Onitsha, Anambra State, South East Nigeria. Tax non-compliance among SMEs remains one of the most persistent challenges facing the Federal Inland Revenue Service and state revenue authorities, limiting government capacity to fund development projects. Despite numerous tax reform efforts, the informal nature of many SME operations continues to hinder voluntary compliance. This study adopts a descriptive research design and collects data from 110 SME owners and managers operating in the Onitsha main market and its environs. A structured questionnaire measuring tax knowledge, perceived fairness, government accountability, and compliance intentions was administered to respondents. Data analysis was conducted using frequency tables, means, and logistic regression. The results indicate that perceived fairness of the tax system and trust in government use of tax revenue are the strongest predictors of compliance behavior among sampled SMEs. Tax knowledge was found to have a moderate but statistically significant effect on compliance intentions. Fear of penalties showed a weak influence on actual compliance. The study concludes that building taxpayer confidence through transparent fiscal governance is more effective than punitive enforcement alone. It recommends that the Anambra State Internal Revenue Service intensify taxpayer education campaigns and simplify filing procedures to encourage voluntary compliance among SMEs in Onitsha.

Keywords: tax compliance, SMEs, Anambra, taxpayer behavior, informal economy.