Institutional Isomorphism, Reflexivity and Digital Tax Stamp Adoption by Manufacturing Firms in Uganda

Abstract

This study examined the influence of institutional isomorphism and reflexivity on the adoption of Digital Tax Stamps (DTS) by manufacturing firms in Uganda. Despite regulatory efforts to enforce DTS as a tax compliance measure, adoption among manufacturing firms required to implement it remains inconsistent, necessitating an examination of the underlying institutional and organizational factors influencing firms’ decisions. Grounded in institutional theory and structuration theory, the study explores how coercive, normative, and mimetic pressures, alongside firms’ capacity for reflexivity, shape DTS adoption.

A cross-sectional explanatory research design was employed, with data collected from 235 employees across various manufacturing firms required by law to use DTS. The study utilized a structured questionnaire to gather quantitative data, which was analysed using descriptive and inferential statistical methods, including exploratory factor analysis, multiple regression modelling, and mediation analysis.

The findings indicate that institutional isomorphic pressures significantly impact DTS adoption, with coercive pressures exerting the strongest influence. However, reflexivity did not significantly mediate the relationship between institutional isomorphism and DTS adoption, suggesting that compliance is primarily driven by external regulatory pressures rather than internal organizational reflection.

This study contributes to the existing literature on tax compliance and digital transformation by highlighting the dominant role of institutional pressures in shaping firms' compliance behaviour. The findings suggest that policymakers should strengthen enforcement mechanisms as this is what the firms largely respond to. Future research should investigate other drivers such as technological infrastructure, firm size, and leadership commitment to better understand what influences firms’ compliance decisions.