Smart Taxation (4Taxation): Effect of Fourth Industrial Revolution (4IR) on tax compliance in Rwanda

Abstract

The fourth industrial revolution (4IR) has led to the raise of smart taxation
(taxation). Smart taxation has come up with different technological innovation
that eases tax declaration, tax registration, tax payment interactions. These
technological innovations in the tax system aim at enhancing tax compliance.
The purpose of this study was to examine the effect of Smart taxation on the tax
compliance in Rwanda taking RRA as the case study. Descriptive and
explanatory research design were used. The study population comprised of 650
employees of RRA headquarter from which 284 samples were selected using
Yamane’s formula. Data were collected from both primary and secondary
sources using questionnaire and document review methods. Data was analysed
using both descriptive and factor analysis. The fitness of the model was tested
using both absolute and incremental fitness tools. The findings from the survey
revealed that there is a positive and strong correlation between smart taxation
and tax compliance as evidenced by multiple R-square of 96. The researchers
recommended that Training of the employees and taxpayers in new skills to be
able to comfortably use the new technological innovation that comes along with
the fourth industrial revolution. Continue educating the taxpayers about the
aim of taxation and modes of taxation to enhance tax compliance since tax
education influences tax compliance