Entrepreneurial Behaviour and Voluntary Tax Compliance Among SMES in Bayelsa State, Nigeria

This study investigates the factors influencing voluntary tax compliance among small and medium-sized enterprises (SMEs) in Bayelsa State, Nigeria. Utilizing a quantitative research design, the study surveyed a population of 130 SMEs, employing a stratified random sampling technique to ensure representative data collection. The research explores the relationships between financial literacy, perceptions of the fairness of the tax system, trust in government institutions, and the informal status of businesses. The findings reveal a strong positive correlation between financial literacy and tax compliance, indicating that SMEs with higher financial knowledge are more likely to meet their tax obligations. Additionally, perceptions of the tax system as fair significantly influence compliance behaviour, with businesses more inclined to comply when they view the system as equitable. Trust in government institutions emerged as a crucial determinant, suggesting that increased credibility and transparency in tax administration can foster greater compliance among SMEs. Conversely, the informal status of businesses showed a weak correlation with compliance. The study concludes that enhancing financial literacy, improving perceptions of fairness in the tax system, and strengthening trust in government institutions are vital for increasing voluntary tax compliance. Recommendations include targeted educational programs for SMEs and policy reforms aimed at enhancing transparency and trust in tax administration. These insights contribute to the existing literature on tax compliance and provide a foundation for future research and policy development to support the growth and formalization of SMEs in Bayelsa State.