An Examination into Tax Compliance Mechanisms: The Effect of Tax Amnesty among SMEs in Lusaka District, Zambia

There is still little empirical data on how amnesty interacts with enforcement, tax awareness, and digital initiatives across various SME compliance profiles, despite Zambia's recurrent tax amnesty programs. The impact of tax amnesty and associated compliance measures on small and medium-sized businesses (SMEs) in Zambia's Lusaka District is investigated in this study. The study uses a Multinomial Logistic Regression (MNL) model to analyze the effects of tax amnesty, tax awareness, tax audits, and tax penalties on low, moderate, and high compliance outcomes using survey data gathered from 400 SMEs. The results show that, although its impacts differ by compliance category, tax amnesty considerably raises the probability that SMEs with high and low compliance will regularize their tax obligations. While enforcement measures like audits and fines deter low-compliance SMEs from complying, they strengthen compliance among businesses that are already in compliance. Similar conditional effects are seen in tax knowledge. These findings emphasize the value of unique compliance tactics above consistent enforcement. By illustrating the conditional efficacy of tax amnesty and enforcement methods within a developing-country SME setting, the study adds to the body of knowledge on tax compliance. Amnesty programs must be integrated with digital systems, taxpayer education, and post-amnesty monitoring in order to support continued compliance, according to policy considerations.