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ABSTRACT
The study examined the effect of tax complexity on tax compliance in African Self- Assessment Environment. The population of the study covered all Africa countries; however a sample of 44 countries was selected. By employing Pearson Correlation and OLS Regression Method, sourced data was analyzed through SPSS version 19. Result indicates a significant negative effect of tax complexity on tax compliance in Africa: taxpayers spend extra one day (19hours) beyond the regional average hours on tax compliance in self assessment environment. Therefore, a good self assessment system should be simple and less complex to make for acceptable level of tax compliance among taxpayers.
Keywords: Complexity, Compliance, Self-Assessment, Tax.
1. INTRODUCTION
Most of African countries have joined global scene in the application of Self-Assessment (SA) system. A recent study which surveys the tax system in Africa disclosed that with the exception of South Africa almost all the countries surveyed issued tax identification number to their taxpayers, and their tax system is based on SA principles (Carter & Cebreiro, 2011). SA is built on the notion of voluntary tax compliance which is designed to improve tax system efficiency (Loo, 2006, 2011; Loo & Ho, 2005; Palil, 2010). Despite efforts of African countries to match up with global trends by implementing SA, they are leftbehind in tax compliance measured by tax revenue as a percentage of GDP (Carter & Cebreiro, 2011). Research shows that one of the factors leading to non-compliance in SA environment is tax complexity (Saad, 2014). Thus, recent report shows that average number of hours it takes to comply with tax obligation in Africa is above the global average (PWC, 2014). In fact, the report shows that average time it takes to comply with tax obligation in Africa is higher than that of Middle-East, European Union, North America, Central America, Asia Pacific and Central Asia.
Therefore, in line with the above development, the paper examines the effect of tax complexity on tax compliance in Africa. The study will be of great significance in the number of ways. First, it would shed more light on tax compliance in Africa since very few studies were carried on this. More specifically, scholars pay little emphasis on the effect of tax complexity and tax compliance in Africa....