Abstract:
This study was undertaken to identify the factors that influence the level of tax compliance in Sri Lanka, specifically focusing on SME's operating in the central province in Sri Lanka. The researcher applied mean values and the standard deviation for responses received and also carried out both correlation tests and multiple regression analysis and further researcher also performed One Way ANOVA and also carried out POST Hoc tests. Data was collected using self-administrated questionnaires and analysed using Statistical Package for Social Science (SPSS-21version) and found that around 67% of the mean values of the replies received in relation to the indicators under the dependent variable reflect a low level of tax compliance in the SME sector companies in the province and also found that taxpayers’ attitudes would be the crucial factor to increase the level of tax compliance with a standardized beta coefficient of 0.541 and in addition, some demographic characteristics have a very strong association with tax compliance.