ASSESSING THE EFFECT OF ELECTRONIC TAX SYSTEMS ON TAX COMPLIANCE AMONG SMALL AND MEDIUM ENTERPRISES IN BENUE STATE

This study examines the effect of electronic tax systems on tax compliance among small and medium enterprises (SMEs) in Benue State, Nigeria. The primary objectives were to assess the effect of digital tools like Point of Sale (POS) systems, E-filing systems, Electronic Payment Portals (EPP), and the Tax Identification Number (TIN) on tax compliance by SMEs. The research employed a mixed-methods approach, combining quantitative data from structured questionnaires with qualitative information gathered through semi-structured interviews. A sample of 196 SMEs were selected using stratified random sampling to ensure proportional representation across different income levels and locations within Benue State. The quantitative data were analyzed using Ordinary Least Squares (OLS) regression to determine the relationships between electronic tax systems and tax compliance. The findings of the study reveal that electronic tax systems have a substantial positive impact on tax compliance by SMEs in Benue State. The adoption of POS systems improved the accuracy and transparency of tax records, making it easier for SMEs to track transactions and remit taxes. The study also found that E-filing systems contributed to a higher rate of timely tax submissions, as businesses appreciated the convenience and reduced administrative burden associated with online filing. The user-friendliness of the E-filing system allowed SMEs to navigate the process more efficiently, thus encouraging compliance. Additionally, the Electronic Payment Portal (EPP) and the use of TIN was found to significantly improve the level of tax compliance. It was concluded that the implementation of electronic tax systems has a positive effect on tax compliance among SMEs in Benue State. The study recommends that the Benue State Internal Revenue Service (BIRS) should focus on improving digital infrastructure and increasing awareness campaigns to further enhance the adoption of electronic tax systems by SMEs, thereby boosting compliance rates and improving revenue generation for the state.