Unveiling the Dual-path Influence on E-tax Filing Adoption Intention: An Integrated TOE-DOI Perspective with Firm-size Moderation

Girma Zeleke
Department of Accounting and Finance, Addis Ababa University, Addis Ababa, Ethiopia

Ashenafi Beyene
Department of Development Finance, Stellenbosch University Business School, Cape Town, South Africa

Sewale Abate
Depatment of Accounting and Finance, Addis Ababa University, Addis Ababa, Ethiopia

Abstract

The purpose of the study was to investigate the factors that influence medium and large enterprises’ intentions to adopt an e-tax filing system in Ethiopia, with respect to the tax-to-GDP ratio having decreased dramatically as well as the increased burden of heavy reporting requirement for businesses (Group, 2024). Despite the advantages offered by digital transformation, such as improved compliance and data management, adoption of e-tax filing has been slow. The study surveyed 266 medium and large enterprises in Ethiopia was conducted for this study. The data were analysed via the PLS-SEM model (SmartPLS v4.1) in combination with a blend of Technological-Organizational-Environmental and Diffusion of Innovation theories. The findings suggest that the IT infrastructure demonstrates a dual-route adoption mechanism that facilitates initial acceptance and boosts perceived advantages in this critical sector. The study identified that compatibility, top management support, firm size, relative advantage, and governmental oversight, significantly influence the adoption of e-tax filing intention, while security concerns and perceived complexity have adverse effect. Furthermore, firm size moderates the negative effects of complexity, with medium-sized businesses having a significant greater negative influence than large firms do.  Despite the apparent efficacy of the government's IT strategy, its influence was statistically insignificant, indicating a disconnect between policy and its implementation. Medium-sized enterprises should prioritize user-friendly interfaces, robust security measures such as end-to-end encryption, and transparent disclosure of the system's benefits. 

Keywords: E-Tax Filing System, Adoption Intention, TOE-DOI Framework, PLS-SEM.

Author Biographies

Girma Zeleke, Department of Accounting and Finance, Addis Ababa University, Addis Ababa, Ethiopia

Ashenafi Beyene, Department of Development Finance, Stellenbosch University Business School, Cape Town, South Africa

Sewale Abate, Depatment of Accounting and Finance, Addis Ababa University, Addis Ababa, Ethiopia