TITLE:
An Explanation of the Levels of Compliance in Filing Company Annual Returns Based on the Theory of Planned Behavior: A Case for Zambia
AUTHORS:
Chimuka Mweetwa, Jackson Phiri
KEYWORDS:
Compliance, Annual Returns, Company Register, Theory of Planned Behaviour, Demographic Factors, External Factors
JOURNAL NAME:
Open Journal of Business and Management,
Vol.7 No.3,
July
26,
2019
ABSTRACT: Company
registers are increasingly becoming a crucial source of business information
for many stakeholders. While most company registers have concentrated on
simplifying business registrations, reducing the number of procedures, time and
cost for small entities to be formed, compliance remains a big challenge for
many company registers. Compliance is not just influenced by economic variables
of enforcement and penalties but influenced by demographic, socio-economic and
institutional factors. The aim of this study was to identify and explain the
factors influencing compliance behaviour in filing company annual returns based
on the Theory of Planned Behaviour. The study used a mixed research approach. A
sample of 165 registered companies was randomly selected from the population of
68,049 active companies on the PACRA register. 9 PACRA officers were selected
using judgment sampling and in-depth interviews were used. Primary data were
collected through structured questionnaires. The secondary data were also
collected by reviewing related published materials. Statistical tests of
independence (chi-square tests) formed the basis of analysis. The results
showed that annual return filings are influenced both by demographic and
external factors. The demographic factors like employment status, age and
education were found to positively influence compliance. Further, compliance
was highest (68%) among those with tertiary education compared with (47%) those
with no form of schooling. The study also revealed that those in formal
employment were more compliant (64%) than those without employment (47%).
Gender was found to be an insignificant factor and it has no influence on
compliance. On external factors, cultural norms, government policies and
compliance fees were identified in the study and were found to have an
influence on compliance (save for compliance fees). Finally, the findings of
the study may guide government institutions to save on enforcement costs (i.e. before they implement costly
sensitization campaigns and educational clinics, they need to understand
variables that affect compliance behaviour). The study findings can help policy
makers and PACRA meet their strategic goals of raising compliance levels.