A Substantive Theory Explaining Namibian Employers’ Tax Compliance Behaviour towards Employee Taxes

A Substantive Theory Explaining Namibian Employers’ Tax Compliance Behaviour towards Employee Taxes

Zelda van der Walt¹, Marina Bornman², Grietjie Verhoef³

¹Faculty of Commerce, Human Sciences and Education, Namibia University of Science and Technology, Namibia

^2,3College of Business and Economics, University of Johannesburg, South Africa

Publication Information

Journal Title: International Journal of Research and Scientific Innovation (IJRSI)
Author(s):Walt, Zelda van der ,Bornman, Marina ,Verhoef, Grietjie
Published On: 07/04/2025
Volume: 12
Issue: 3
First Page: 151
Last Page: 166
ISSN: 2321-2705

Cite this Article Zelda van der Walt, Marina Bornman, Grietjie Verhoef; A Substantive Theory Explaining Namibian Employers’ Tax Compliance Behaviour towards Employee Taxes, Volume 12 Issue 3, International Journal of Research and Scientific Innovation (IJRSI), 151-166, Published on 07/04/2025, Available at https://rsisinternational.org/journals/ijrsi/articles/a-substantive-theory-explaining-namibian-employers-tax-compliance-behaviour-towards-employee-taxes/

Abstract

Studies on tax compliance behaviour seek to identify the key determinants and frameworks for the compliance decision. These studies primarily explain the compliance decisions of tax-liable persons regarding their own taxes. However, compliance behaviour relating to employers’ withholding and remitting employees’ taxes may be more complex than the conduct of individuals regarding their own taxes. Few studies have investigated the compliance decisions of employers regarding withholding and remitting taxes on behalf of employees.

In this study, using a grounded theory (GT) approach, a systematic analysis of Namibian employers in micro, small and medium enterprises (MSMEs) attitude towards employee taxes forms the basis for developing a substantive theory explaining employers’ compliance behaviour regarding their statutory obligation towards employee taxes. The results show that employers’ compassion towards employees, moral values, upbringing and religion, lack of tax knowledge, and the power of the tax authority are the core variables influencing their compliance decisions. These results advance the understanding of employers’ compliance behaviour and may assist tax authorities’ efforts in encouraging compliance behaviour towards employee taxes.

Keywords: Micro, small and medium enterprises, employee taxes, compliance, employers, compassion, moral values, upbringing and religion, the power of the tax authority, lack of tax knowledge, grounded theory.