Taxpayer Attitudes, Compliance Benefits Perceptions and Compliance Costs of the Value Added Tax System in Botswana

This research is an original study of the taxpayer attitudes, compliance benefits perceptions and compliance costs of the value added tax (VAT) system in Botswana. In 2009/10 and 2010/11, 600 and 100 businesses, respectively, were surveyed. Respondents were presented with attitudinal statements and asked to express their attitudes and benefits perceptions concerning VAT, using a questionnaire that utilised a five-point Likert scale. Internal consistent reliability of responses to the attitudinal statements is measured using Cronbach's alpha, while responses are analysed using SPSS software. The findings suggest that businesses in Botswana find VAT requirements to be burdensome and VAT compliance costs high. Further investigation reveals that the businesses that find VAT to be burdensome have higher VAT compliance costs. The respondents who perceive the VAT system to be unreasonably complicated report higher average VAT compliance costs. However, these costs are mitigated by the benefits that accrue to taxpayers in the form of improved record keeping, as indicated by 69 per cent of the respondents. The study concludes with policy implications for government, business taxpayers and researchers. This study is significant as it is original and also contributes to the scarce literature on taxpayer attitudes