Abstract: Small and medium tax payers form the greatest percentage of tax payers. In an effort to enhance tax compliance hence tax collection, the government of Rwanda introduced e-tax system of filling and remitting tax returns. As much as the RRA has tried to achieve its tax collection targets the tax collected is still low and this still leads to a relatively large budget deficit. Since the introduction of the system, no study has analyzed the perception of small and medium tax payers towards the e-tax system and the extent of its adoption. The research purpose was therefore to assess the effects of electronic tax system on tax compliance among small and medium tax payers in Nyarugenge sector. The specific objectives included to establish the effect of e-filling on tax compliance among small and medium tax payers in Nyarugenge sector, to examine the effect of e-payment on tax compliance among small and medium tax payers in Nyarugenge sector and lastly to identify the challenges of electronic tax system to the small and medium tax payers in Nyarugenge sector. The study adopted both correlational and descriptive research designs. The target population for the study included small and medium tax payers in Nyarugenge sector. A sample of 99 respondents was drawn from a population of 15,507 using Slovin’s formula with 10% margin of error. Proportionate stratified and simple random sampling techniques were adopted in selecting the sample size. The findings indicated a strong positive association between E-tax system and tax compliance with high Rsquared value of 68.4%. The study recommended training programs and improved fibre optic network to improve connectivity and server efficiency. Primary data was collected using closed and open ended questionnaires. The data was analyzed using SPSS version 20 and presented in form of tables and graphs. The findings of this research will help the RRA management staff to know the various challenges facing tax payers in adopting the e-tax system for appropriate action to be taken, small and medium tax payers to know the benefits of e-tax system in improving efficiency of doing business and to the future researchers as reference material.
Keywords: Electronic tax, SM Taxpayers, E-tax systems, Nyarugenge Sector.
Title: EFFECT OF ELECTRONIC TAX SYSTEM ON TAX COMPLIANCE AMONG SMALL AND MEDIUM TAX PAYERS IN RWANDA: CASE STUDY OF NYARUGENGE SECTOR
Author: UTETIWABO SOLANGE, Dr. PATRICK MULYUNGI, Dr. OLUOCH OLUOCH
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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