An Investigation of Rental Income Tax Compliance Levels among Residential Property Owners. A Case Study of Kabwata Constituency in Zambia

Purpose: This study investigated rental income tax compliance among residential homeowners in Zambia, focusing on Kabwata Constituency as a case study. The research aimed to understand the factors influencing homeowners' compliance with rental income tax obligations. Methodology: A descriptive research design was employed, utilizing a stratified random sampling technique to select a sample of 204 respondents from a target population of 58,000 residential homeowners. Data were collected through an online questionnaire and analyzed using descriptive statistics, including mean, median, mode, and standard deviation, through SPSS version 28. Findings: The findings revealed a moderate level of tax compliance (45.1%) among homeowners, with low perceived rental tax rates (41.2%), minimal penalties (25.5%), and low audit probability (43.1%) being major contributors to non-compliance. Demographic factors such as age, education level, and employment status significantly influenced tax compliance behavior. The regression model indicated that perception, knowledge, and compliance cost accounted for 62.6% of the variance in compliance levels, and the model was statistically significant (p = 0.012). The study concluded that taxpayer perception and knowledge positively influence compliance, while high compliance costs negatively affect filing behavior. Unique Contribution to Theory, Policy and Practice: It was recommended that the Zambia Revenue Authority (ZRA) intensify awareness campaigns to improve taxpayer attitudes and understanding of rental income tax. Additionally, the incorporation of tax education into school curricula and the introduction of online tutorials to reduce filing costs were suggested as measures to enhance voluntary compliance and improve overall tax administration efficiency.