Facilitation and voluntary tax compliance among micro, small and medium enterprises (MSMEs) in Uganda: testing the mediating effect of stakeholder collaboration

Purpose This study aims to establish the direct relationship between facilitation and voluntary tax compliance, as well as the mediating effect of stakeholder collaboration. Design/methodology/approach This study used a quantitative approach with a sample size of 371 micro, small and medium-sized enterprises (MSMEs). To ascertain the mediating effect of collaboration in the association between the study variables, correlation, hierarchical regression and mediation analyses were conducted using the Statistical Package for the Social Sciences and Medgraph, respectively. Findings The study results indicate that facilitation and stakeholder collaboration significantly explain voluntary tax compliance, and stakeholder collaboration significantly mediates the relationship between facilitation and voluntary tax compliance among MSMEs. Practical implications This study contributes to efforts to mobilize revenue in developing countries like Uganda through the Uganda Revenue Authority (URA). The findings suggest that if URA collaborates effectively with stakeholders, such as traders’ associations that can influence their members to register, file returns and pay taxes, more revenue may be mobilized. In addition, it is important for tax administrators to educate taxpayers and improve tax awareness rather than relying solely on strict enforcement if voluntary tax compliance is to be achieved in developing countries. Originality/value This study strengthens existing literature on voluntary tax compliance using evidence from Uganda by confirming that stakeholder collaboration significantly mediates the relationship between facilitation and voluntary tax compliance. This contrasts with previous investigations, which focused only on the direct relationship between the study variables in predicting voluntary tax compliance.