Author(s)

Chimuka Mweetwa¹, Jackson Phiri²

¹Graduate School of Business, University of Zambia, Lusaka, Zambia.
²Department of Computer Sciences, School of Natural Sciences, University of Zambia, Lusaka, Zambia.

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.

Compliance, Annual Returns, Company Register, Theory of Planned Behaviour, Demographic Factors, External Factors

Mweetwa, C. and Phiri, J. (2019) An Explanation of the Levels of Compliance in Filing Company Annual Returns Based on the Theory of Planned Behavior: A Case for Zambia. Open Journal of Business and Management, 7, 1358-1379. doi: 10.4236/ojbm.2019.73094.