Determinants of tax compliance among rental income earners (A study at Pokhara Metropolitan City)

Abstract

The main aim of this study is to examine the Determinants of Tax Compliance among Rental Income Earners: A Study at Pokhara Metropolitan City. For this a descriptive and survey design is utilized to present and determine the status of the phenomenon under investigation. The study sample involved the 183 house owners on the basis of non-probability quota sampling method atlease five respondents from each ward and six five households each from the three wards i.e., ward no. 9, 11 and 17 of Pokhara metropolitan city. The findings of the study indicate that tax compliance has a strong positive relationship with all the independent variables, including tax rate, income, fines and penalties, attitude and perceptions, and tax knowledge. The results of the correlation analysis indicate that tax rate, fines and penalties, attitude and perceptions, income, and tax knowledge are all positively associated with tax compliance. This means that as these factors increase, taxpayers may be more likely to comply with tax laws. Additionally, all correlations were found to be statistically significant, indicating that the observed relationships are unlikely to have occurred by chance. These findings suggest that tax authorities should focus on increasing tax knowledge, improving attitudes and perceptions towards taxes, enforcing penalties and fines strictly, and setting appropriate tax rates to encourage greater tax compliance. Overall, these results can help inform the development of effective tax policies and enforcement strategies aimed at improving tax compliance among taxpayers. Similarly, it can be concluded that tax rate, income, and tax knowledge are significant predictors of tax payer compliance, while fines and penalties and attitude and perceptions are not statistically significant predictors. An increase in tax rates and income is associated with an increase in tax payer compliance, while a greater understanding of tax laws and regulations is also associated with greater tax payer compliance. However, fines and penalties and attitude and perceptions do not have a statistically significant impact on tax payer compliance. The p-values support the significance of tax rate, income, and tax knowledge in predicting tax payer compliance, while fines and penalties and attitude and perceptions do not have significant predictive power. Keywords: Rental tax, tax rate, tax knowledge, fines and penalties, tax compliance