IDEAS home Printed from https://ideas.repec.org/a/mgs/ijmsba/v4y2018i4p7-17.html
   My bibliography  Save this article

An Assessment of Risk Management Practices of SME Taxpayers in Malawi and their Impact on Tax Compliance

Author

Listed:
  • Stella Binauli Nanthuru

    (School of Management, Wuhan University of Technology, Wuhan, P.R. China)

  • Liu Pingfeng

    (School of Economics, Wuhan University of Technology, Wuhan, P.R. China)

  • Nie Guihua

    (School of Economics, Wuhan University of Technology, Wuhan, P.R. China)

  • Victoria Lucas Mkonya

    (School of Management, Wuhan University of Technology, Wuhan, P.R. China)

Abstract

Athis study assesses understanding of Risk, and extent of risk management practices in Small and Medium Enterprise (SME) taxpayers in Malawi, subsequently, investigates their relationship with financial performance and tax compliance. The study focuses on unlimited business sectors of SME taxpayers which drew a representation of our sample of 324 SMEs, using Partial Least Square-Structural Equation Modeling (PLS-SEM) to analyze and test hypotheses. Results indicate that half of the SME taxpayers are aware of risks, but only 23% of respondents underwent any training on risk management. 90% of respondents revealed that tax rates are the most significant business constraint; value-added tax (VAT) being the most challenging tax to file. Most respondents identified risks through experience, with risk management practices centering on Chief Executive Officers. Empirical evidence on Path analysis and bootstrapping results established a significant relationship between understanding risks, risk management practices, financial performance and Tax compliance, which is positive, signaling a roadmap for risk mitigation if tax administration is to widen its SME tax net.

Suggested Citation

  • Stella Binauli Nanthuru & Liu Pingfeng & Nie Guihua & Victoria Lucas Mkonya, 2018. "An Assessment of Risk Management Practices of SME Taxpayers in Malawi and their Impact on Tax Compliance," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 4(4), pages 7-17, May.
    • Handle: RePEc:mgs:ijmsba:v:4:y:2018:i:4:p:7-17
    DOI: 10.18775/ijmsba.1849-5664-5419.2014.44.1001
    as

    Download full text from publisher

    File URL: https://researchleap.com/wp-content/uploads/2018/05/01.An-Assessment-of-Risk-Management-Practices-of-SME-Taxpayers-in-Malawi-and-their-Impact-on-Tax-Compliance-1.pdf
    Download Restriction: no
    File URL: https://researchleap.com/assessment-risk-management-practices-sme-taxpayers-malawi-impact-tax-compliance/
    Download Restriction: no
    File URL: https://libkey.io/10.18775/ijmsba.1849-5664-5419.2014.44.1001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kafigi Jeje, 2020. "Risk-Taking and Performance of Small and Medium-Sized Enterprises: Lessons from Tanzanian Bakeries," Journal of Economics and Behavioral Studies, AMH International, vol. 12(3), pages 1-22.
    2. Asa Romeo Asa & Johanna Pangeiko Nautwima, 2021. "Determinants of Financial Capability: A Situational Analysis for Namibia," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 7(6), pages 7-13, February.

    More about this item

    Keywords

    Tax administration; Understanding risk; Risk management practices; Tax compliance; Financial performance; SME taxpayers;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mgs:ijmsba:v:4:y:2018:i:4:p:7-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bojan Obrenovic (email available below). General contact details of provider: https://researchleap.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.