DOI: https://doi.org/10.36347/sjebm.2025.v12i01.001

Pages: 1-7

Tax revenue is the major source of public resources and tax compliance is vital for any government to have adequate financial resources for implementing development projects and provision of social services to its citizens. Effective strategies for enhancing tax compliance are those informed by research. One of the taxes that companies pay is Fringe Benefit Tax (FBT). This study investigated determinants of FBT compliance among private sector companies in Malawi, grounded in the Expected Utility Theory. The study employed a multistage cluster sampling technique through which 128 registered private sector companies out of 1133 were surveyed. The surveyed companies were those that are located in Malawi’s three major cities of Blantyre, Lilongwe and Mzuzu, where corporate concentration is highest. Data analysis was conducted in STATA by applying a Probit model to identify factors influencing FBT compliance. The findings indicate that firm size, method of tax remittance and trust of good usage significantly affect compliance. The study recommended that MRA should enhance promotion of electronic platforms for paying taxes and consider developing a special FBT package that could be more convenient to small companies. The government should work hard towards gaining more trust from taxpayers through improvements on accountability and transparency in the way public finances are spent. With the existence of Access to Information Act, it should be easy for the public to access information on government spending there by increasing trust and tax compliance.