Data Analytics for Financial Literacy and Voluntary Tax Compliance Among Small Business Owners

Abstract

Purpose: Small business owners account for a large share of the tax gap, yet much of their noncompliance reflects confusion, poor records and disproportionate compliance costs rather than deliberate evasion. This article asks how descriptive, diagnostic, segmentation, survey and behavioural analytics can connect financial literacy to voluntary tax compliance without collapsing support into enforcement. Design: A critical integrative review combines deterrence economics, the slippery slope framework of trust and power, tax morale research, financial capability measurement and compliance cost studies, appraised under a predefined protocol with a publication window ending in 2024. Findings: Financial education reliably raises knowledge but transfers weakly to behaviour; simple rules of thumb and record-keeping routines transfer better than conceptual training. Trust in the tax authority conditions whether better understanding produces voluntary rather than grudging or avoidant compliance, and compliance costs fall most heavily on the least literate owners. Contribution: The article proposes the Financial Literacy, Trust and Compliance Analytics (FLiTCA) framework, which separates can-not, know-not and will-not barriers, matches segments to education, simplification or service remedies, and ranks owners by expected benefit of help rather than by suspected evasion. Seven falsifiable propositions and a stepped-wedge validation design are specified. Implications: Administrations should measure tax-specific literacy directly, firewall support analytics from audit selection, and judge programmes by voluntary filing, accuracy and trust rather than outreach volume.