The Effect of Peer Influence on Income Tax Compliance among Owners of Small and Medium Enterprises in Soroti District, Uganda

Abstract

This study investigates the effect of peer influence on income taxpayer compliance among owners of Small and Medium Scale Enterprises in Soroti district, Uganda. Income tax compliance contributes to the social and economic development of most economies through reduction of government fiscal deficit and debt, and as well generating finance for infrastructure development. The study findings are based on raw data collected by use of questionnaire. The raw data was then analyzed using Statistical Package for Social Scientists, where ordinary regression analysis was used to determine the effect of peer influence on income tax compliance proxied as filing of income tax returns and prompt payment of income tax. The study randomly selected 50 owners of SMEs in soroti district, Uganda. The findings show that peer influence has a positive and insignificant relationship with income tax compliance both proxied as filing of income tax returns and prompt payment of income tax. Conclusions were drawn based on the study findings while implications and recommendations are also discussed based on the findings.