Perceived effects of an electronic filing system on tax compliance in a district municipality, South Africa

Abstract

Globally, many countries have taken advantage of electronic tax filing system in order to enhance their effectiveness and efficiencies in the delivery of tax services. In the current environment technology commands organisational strategies and influences operations extensively. The objective of this paper is to examine the perception and attitude of taxpayers in the Dr Ruth Segomotsi Mompati District towards the introduction of e-filing by the South African Revenue Service, and whether the system has any effects on tax compliance. In the quantitative approach of research, a questionnaire was administered among 202 individual taxpayers in the district. The adoption of this tax system has been received differently, in some instances met with taxpayers’ resistance and ignorance, but overall a positive picture has emerged from this study. The results and perceptions of taxpayers are said to be influenced by various factors such as cost-benefits analysis, attitude, perceived usefulness and ease of use, system’s credibility and security. Research has also reported that many tax authorities that have leveraged on e-filing have experienced a reduction in handling costs of returns, shorter turnaround for processing and assessment of tax returns, and improved tax compliance. The growth in the number of tax compliant taxpayers means there is a decrease in the tax evasion and eventually in the tax gap. In this study, the majority of respondents acknowledge the e-filing benefits such as paying of tax refunds quicker, ease of submission of tax returns, ease of payment of tax liability. In spite of these results, the South African Revenue Service should continue to raise awareness of uninformed and inexperienced taxpayers to migrate to e-filing through taxpayer education workshops and media campaigns.