Non-financial performance indictors as determinants of VAT compliance: evidence from SMES in Edo State, Nigeria
DOI:
https://doi.org/10.33003/fujafr-2026.v4i1.322.264-275Keywords:
Tax compliance, Value added tax, Customer satisfaction, SMEs, NigeriaAbstract
Purpose: Value Added Tax (VAT) compliance remains an important factor influencing government revenue generation and fiscal sustainability in Nigeria. However, compliance among small and medium-sized enterprises (SMEs) is often constrained by weak internal operational practices. This study explores the impact of customer satisfaction, employees’ retention, record-keeping quality, and product innovation on VAT compliance among SMEs in Edo State, Nigeria.
Methodology: The study adopted a descriptive survey research design. Data was collected from 392 SME owners and managers using structured questionnaires and it was analysed through descriptive statistics, Pearson correlations, and multiple regressions.
Results and conclusion: The results indicate that customer satisfaction, employee retention, record-keeping quality, and product innovation each have a positive and statistically significant influence on VAT compliance among SMEs. The regression analysis further reveals that these variables jointly explain approximately 50.6% of the variation in VAT compliance behaviour. The study concludes that SMEs with stronger internal operational practices are more likely to demonstrate higher levels of VAT compliance.
Implication of Findings: These results suggest that enhancing operational practices in SMEs can lead to improved VAT compliance, benefiting both businesses and tax authorities. Therefore, tax authorities should promote capacity-building initiatives that encourage SMEs to strengthen customer relations, retain skilled employees, maintain accurate financial records, and adopt innovative technologies that facilitate VAT reporting and compliance.
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