Tax Evasion Determinants in Banadir Region, Somalia

Abstract
Tax evasion is one of the biggest challenges the current government in Somalia is facing in
terms of increasing its revenue, it also hinders the ability of the government to provide basic
services to its citizens. This study evaluates the determinants of tax evasion in Banadir Region
of Somalia. A questionnaire was used to collect information on how drivers in the region pay
their taxes, 240 randomly selected drivers have successfully responded to this study. The
outcome of the study demonstrates that tax system has a significant negative relationship with
tax evasion. On the other hand, tax rate, corruption, income level, and also education level have
a positive significant relationship with tax evasion. This study suggests that essential measures
ought to be taken by the tax authorities to enhance income collection and decrease tax evasion.
It is additionally recommended that crusade against corruption, public enlightenment on tax
issues and correction of tax procedures should be embraced.