The Relationship Between the Taxation System and Implementation Procedures in the Commercial Banking Sector in South Sudan

This study examines the relationship between taxation system implementation and compliance in South Sudan’s commercial banking sector, a critical area given the country’s ongoing efforts to diversify revenue sources and reduce dependence on oil. The research is motivated by persistent challenges of weak institutional frameworks, inconsistent enforcement, and limited administrative capacity that undermine effective tax compliance in fragile state contexts. Using data collected from 372 respondents across 10 commercial banks, Pearson correlation and multiple regression analyses were applied to assess the influence of implementation procedures, administrative practices, and institutional coordination on compliance outcomes. The findings reveal extremely strong positive correlations among all variables, with coefficients ranging from 0.984 to 0.995 (p < 0.01). Institutional coordination (β = 0.724) and administrative practices (β = 0.559) emerged as the most significant positive predictors of compliance, underscoring the importance of inter-agency collaboration and transparent administrative systems. Interestingly, implementation procedures showed a modest but statistically significant negative association (β = –0.284), suggesting that overly rigid, bureaucratic, or poorly designed procedures may discourage compliance rather than enhance it. This result points to the need for simplifying and streamlining processes to reduce compliance burdens on commercial banks. The study highlights that effective compliance depends less on procedural rigidity and more on coordinated institutions and efficient administration. It contributes to the limited body of literature on taxation in South Sudan and fragile state contexts more broadly. The findings provide practical insights for policymakers and financial institutions by recommending reforms focused on strengthening coordination, modernizing administrative practices, and critically reviewing implementation frameworks to foster a resilient compliance culture.