Tax Education Awareness among Taxpayers of the RIMPE – Popular Businesses Regime in Ecuador

Abstract

The mandatory incorporation of more than six hundred thousand taxpayers into the Popular Businesses segment of Ecuador's Simplified Regime for Entrepreneurs and Popular Businesses was not accompanied by a training policy proportional to its scale. The aim was to assess the level of tax education awareness among these taxpayers and its relationship with compliance with formal obligations. A quantitative, cross-sectional, descriptive-correlational design was adopted (n = 400). The forty-three-item instrument distinguishes knowledge verified through correct-answer items from self-perceived knowledge measured on a Likert scale, with reliability coefficients between 0.760 and 0.783. The responses come from a Monte Carlo simulation calibrated on proportions published in previous studies, so the results describe the expected behaviour of the instrument and do not estimate population parameters. The objective knowledge index reached 3.52 out of 10 (SD = 2.54), with 53.2 % at the low level, against self-perceived knowledge of 67.8 out of 100: the mean gap is 32.6 percentage points and 96.2 % overestimate themselves. Some 66.5 % have received no tax training and 70.2 % consider institutional training insufficient, even though 98.2 % declare themselves willing to be trained. The association between knowledge and compliance proved significant and large in magnitude, and each additional point in the index multiplies the relative odds of high compliance by 1.610. Analysis of the effective tax rate further reveals that the regime is internally regressive within each bracket carrying a positive quota. Tax education therefore behaves as an economically relevant determinant of compliance.