Acceptance of electronic tax system and the contribution of SMEs to tax revenue through the mediation of tax compliance

There is no doubt that taxes are critical to the economic well-being of a country. What seems to be unclear is why tax compliance has been a major problem for tax authorities in Nigeria and some other sub-Saharan African states, thereby circumscribing the ability government to actualise its revenue potentials. Consequently, this study sought to ascertain the extent to which the acceptance of electronic tax system influences the contribution of Small and Medium Enterprises (SMEs) to tax revenue through the mediation of tax compliance. This study employed quantitative methodology and the design was a survey of 360 SME owners in the Niger Delta region of Nigeria with 179 of them participating. The study used random sampling technique to select the states in the area. The research data consisted of information elicited from the respondents using a structured questionnaire validated through experts’ opinions and a content validity index although Cronbach’s alpha served as the reliability test. SEM path diagram analysis served as the method of data analysis. The results of the study showed a significant acceptance of electronic taxation by SMEs in Nigeria. In addition, acceptance of the electronic tax system had a significant influence on tax compliance and tax compliance significantly influences tax revenue. One contribution of the study is that it shows that SMEs add value to the nation through their significant contribution to tax revenue. With a comprehensive framework that incorporates the unique constructs of the independent variables, this study offers a novel adjustment to previous studies through its measurement of electronic tax systems. The study suggests the need to identify other variables that may consolidate the operationalisation of electronic tax system.