Tax compliance among Small and Medium Enterprises (SMEs) is a critical component of economic stability, particularly in developing regions like Somalia, where SMEs form the backbone of the economy. This study examines factors influencing tax compliance among SMEs in Lasanod, SSC-Khaatumo, focusing on perceived fairness of the tax system, tax knowledge and awareness, tax fines and penalties, and tax rates. A quantitative research design was employed, with data collected from 384 SMEs using a structured questionnaire and analyzed through descriptive and inferential statistics. The findings reveal significant relationships between tax compliance and three key predictors: perceived fairness of the tax system (r = 0.749, p < 0.01), tax fines and penalties (r = 0.727, p < 0.01), and tax knowledge and awareness (r = 0.513, p < 0.01). Regression analysis further confirms that tax fines and penalties have the strongest positive effect on compliance (? = 0.497, p < 0.01), followed by perceived fairness of the tax system (? = 0.468, p < 0.01) and tax knowledge and awareness (? = 0.188, p < 0.01). Surprisingly, tax rates showed no statistically significant impact on compliance (? = 0.010, p = 0.763). These results underscore the need for policymakers to prioritize transparent and equitable tax systems, enhance taxpayer education, and implement effective enforcement mechanisms to improve compliance. Addressing these factors can strengthen Somalia’s tax base, reduce reliance on external funding, and promote sustainable economic growth, particularly in conflict-affected regions like SSC-Khaatumo.
Akrati, A. (2024). Kaleidoscope of Tax Rate and Tax Compliance of BRICS Countries. International Journal For Multidisciplinary Research, 6(3), 1–4. https://doi.org/10.36948/ijfmr.2024.v06i03.22469
Ajzen, I. (2020). The theory of planned behavior: Frequently asked questions. Human Behavior and Emerging Technologies, 2(4), 314–324. https://doi.org/10.1002/hbe2.195
Ali Abdinur, M., Khalif Farah, A., Abdulkadir Kassim, A., & Abdiwahid Hashi, M. (2020). the Influence of Tax Adminstration on Revenue Generation in Somalia. Al-Rashad Journal of Islamic Finance, 1(1), 1–23. https://doi.org/10.46722/ajif.v1.i1.20a
Alm, J. (2019). What Motivates Tax Compliance? Journal of Economic Surveys, 33(2), 353–388. https://doi.org/10.1111/joes.12272
Asrinanda, Y. D. (2018). The Effect of Tax Knowledge, Self Assessment System, and Tax Awareness on Taxpayer Compliance. International Journal of Academic Research in Business and Social Sciences, 8(10), 539–550. https://doi.org/10.6007/ijarbss/v8-i10/4762
Ayneshet Agegnew Alemu. (2020). Impact of Tax Audit on Tax Compliance with Reference to Category “A” Taxpayers: A Case Study in Hawassa City Administration, South Nations, Nationalities and Peoples’ Regional State of Ethiopia. Journal of Modern Accounting and Auditing, 16(6), 278–290. https://doi.org/10.17265/1548-6583/2020.06.004
Biru, A. M. (2020). Factors That Affect Tax Compliance Behavior of Small and Medium Enterprises: Evidence from Nekemte City. European Journal of Business and Management, 12(19), 29–41. https://doi.org/10.7176/ejbm/12-19-04
Carnahan, M. (2015). Taxation challenges in developing countries. Asia and the Pacific Policy Studies, 2(1), 169–182. https://doi.org/10.1002/app5.70
Chanita, O. A., & Sitinjak, N. D. (2021). Peranan Pengetahuan Pajak dan Kesadaran Pajak bagi Kepatuhan Pajak Pelaku Usaha E-Commerce. Jurnal Manajemen Dan Kewirausahaan, 9(2), 233–238. https://doi.org/10.26905/jmdk.v9i2.6203
Damayanti, T. W., Matasik, A. L., & Supramono. (2021). Market competition, fairness and tax compliance: the formal sector perspective. Journal of International Studies, 14(1), 24–40. https://doi.org/10.14254/2071-8330.2021/14-1/2
Ellawule, A., Bashir, Y. M., Dalhat, B. S., & Suleiman, N. (2024). The Moderating Effect of Tax Knowledge on the Relationship between Tax Rates and Tax Compliance of MSMES in Nigeria. FUDMA Journal of Accounting and Finance Research [FUJAFR], 2(1), 118–133. https://doi.org/10.33003/fujafr-2024.v2i1.81.118-133
Fauziyyah, D. I., Septiani, T., & Musyaffi, A. M. (2020). Potential Factor that Determines Taxpayer Compliance: The Development of Theory of Reason Action. 123(Icamer 2019), 63–66. https://doi.org/10.2991/aebmr.k.200305.016
Fuad, K., & Khusfiyah, L. (2019). Revealing Awareness and Compliance of Tax (Case Study in Tax Office (KPP) Pratama Jepara). Journal of Applied Accounting and Taxation, 4(2), 125–137.
Hamid, N. A., Ibrahim, N. A., Ariffin, N., Taharin, R., & Jelani, F. A. (2019). Factors Affecting Tax Compliance among Malaysian SMEs in E-Commerce Business. International Journal of Asian Social Science, 9(1), 74–85. https://doi.org/10.18488/journal.1.2019.91.74.85
Hassan, A. M. (2022). The Small and Medium Enterprises’ Contributions to Ongoing Economic Developments in Somalia. Journal of Industrial Policy and Technology Management, 5(2), 177–188.
Hofmann, E., Voracek, M., Bock, C., & Kirchler, E. (2017). Tax compliance across sociodemographic categories: Meta-analyses of survey studies in 111 countries. Journal of Economic Psychology, 62, 63–71. https://doi.org/10.1016/j.joep.2017.06.005
Inayah, N., & Utomo, B. (2023). THE INFLUENCE OF PERCEPTIONS OF TAX SYSTEM EFFECTIVENESS, TRUST IN THE GOVERNMENT, AND PERCEPTIONS OF CORRUPTION ON TAX COMPLIANCE MEDIATED BY TAXPAYER AWARENESS (Study on MSMEs Taxpayers of Grobogan Regency). Jurnal Al-Iqtishad, 19(1), 1. https://doi.org/10.24014/jiq.v19i1.20357
Isak, N. N. (2018). Challenges of domestic revenue mobilization in somalia. International Journal of Economics, Commerce and Management, VI(9), 172–181.
Ishak, S. N., Azemi, A., Mohd Yunus, M. H. S., & Abdul Talib, N. (2023). the Impact of Tax Awareness and Tax Knowledge on Tax Non-Compliance From the Perspective of Potential Taxpayers. Advanced International Journal of Business, Entrepreneurship and SMEs, 5(18), 11–21. https://doi.org/10.35631/aijbes.518002
Le, H. T. H., Tuyet, V. T. B., Hanh, C. T. B., & Do, Q. H. (2020). Factors affecting tax compliance among small-and medium-sized enterprises: Evidence from vietnam. Journal of Asian Finance, Economics and Business, 7(7), 209–217. https://doi.org/10.13106/jafeb.2020.vol7.no7.209
Maow, B. A. (2021). Küçük ve Orta Ölçekli ??letmelerin (KOB?’ler) Somali’deki Ekonomik Büyüme ve ?stihdam Yarat?lmas?na Etkisi. ?ktisat Politikas? Ara?t?rmalar? Dergisi - Journal of Economic Policy Researches, February, 45–56. https://doi.org/10.26650/jepr818861
Merkusiwati, N. K. L. A., & Suaryana, I. G. N. A. (2021). Persepsi Wajib Pajak Mengenai Penggelapan Pajak, Keadilan Sistem Perpajakan Dan Tax Amnesty Pada Kepatuhan Perpajakan. E-Jurnal Akuntansi, 31(12), 3207. https://doi.org/10.24843/eja.2021.v31.i12.p13
Muhwa, G., & Omboi, B. (2023). Imposition of Tax Penalties and Interest and Its Influence on Tax Compliance of Small and Medium-Sized Enterprises in Nairobi County, Kenya. The University Journal, 5(2), 40–50. https://doi.org/10.59952/tuj.v5i2.190
Nguyen, H. T. (2022). Factors affecting tax compliance of small and medium enterprises in Hung Yen province, Vietnam. Accounting, 8(2), 111–122. https://doi.org/10.5267/j.ac.2021.7.010
Perveen, N, & Ahmad, A. (2022). Tax technology, fairness perception, and tax compliance among individual tax payers. Audit and Accounting Review, 2(2), 99–120. https://doi.org/10.32350/aar.22.05
Rahmayanti, N. P., Sutrisno T., S., & Prihatiningtias, Y. W. (2020). Effect of tax penalties, tax audit, and taxpayers awareness on corporate taxpayers’ compliance moderated by compliance intentions. International Journal of Research in Business and Social Science (2147- 4478), 9(2), 118–124. https://doi.org/10.20525/ijrbs.v9i2.633
Ricky Rudianto, N. A. (2018). Tarif Pajak, Probabilitas Pemeriksaan Pajak Dan Tingkat Kepatuhan Pajak: Sebuah Studi Eksperimen. Ihtiyath?: Jurnal Manajemen Keuangan Syariah, 2(2), 172–189. https://doi.org/10.32505/ihtiyath.v2i2.709
Saad, N. (2014). Tax Knowledge, Tax Complexity and Tax Compliance: Taxpayers’ View. Procedia - Social and Behavioral Sciences, 109(1), 1069–1075. https://doi.org/10.1016/j.sbspro.2013.12.590
Abdinur, M. A., & Karcioglu, R. (2025). Factors Affecting Tax Compliance among Small Medium Sized Enterprises in Lasanod, SSC-Khaatumo, Somalia. International Journal of Academic Research in Accounting, Finance and Management Sciences, 15(1), 103–121.
