Tax Enforcement Tools and Tax Compliance in Ondo State, Nigeria

Abstract

This study assessed the effectiveness of tax enforcement tools as panacea for improving tax compliance and overall tax income in the Ondo State, Nigeria. Survey research design was adopted using primary data sourced through administration of structured questionnaire on 150 selected respondents from among staff of Federal Inland Revenue Service and State Board of Internal Revenue Service within the state. The Taro Yamane formula and judgment sampling technique were used to arrive at the sampled respondents. Outcome of Ordinary Least Square regression analysis showed regression coefficient and p-value of tax-audit (0.278; p=0.03<0.05) and tax penalty (0.463; p=0.000<0.05) respectively, indicating a positive and significant relationship of the two explanatory variables with tax compliance at .05 level of significance. The Implication is that a marginal increase in tax audit and tax penalty will lead to increase in tax compliance in Ondo State. No meaningful association exists between tax amnesty and tax compliance based on the finding of this study perhaps tax amnesty is a new policy that was just launched to encourage voluntary tax compliance. As such, it is imperative that tax audit and imposition of tax penalties be encouraged and sustained. These are envisaged to further improve the degree of tax compliance, consequently enhancing government tax revenue generation to augment dwindling oil revenue in Nigeria. As regards relatively new and still under watch tax amnesty, it may turn out to be a veritable tool for voluntary compliance in future if properly nursed.

The Effect of Tax Penalty, Probability of Audit and Fair Treatment on Permanent Voluntary Disclosure: Tax Professionals’ Perspective

“…Several findings in the tax compliance field have offered a similar result (Hsu & Kan, 2020;Rahmayanti et al, 2020;Oladele et al, 2019). However, it contradicts the findings of Bangun et al (2018) and Lavic (2023).…”

Personal Income Tax Compliance in Nigeria: A Generalised Ordered Logistic Regression

“…The search for a sustainable solution to tax non-compliance has remained a paramount agenda for the Nigerian government and the tax authorities. To improve personal income tax compliance rate in Nigeria, the Nigerian government, as well as the tax authorities, have employed some economic factors like reduction or increase in tax rates, carrying out tax audits to detect non-compliant persons, as well as meting out penalties to tax offenders (Oladele et al, 2019). Also, Psychological factors like a reduction of tax burdens, provision of tax incentives, tax amnesties, as well as rewards for compliant citizens have been implemented (Oladele et al, 2019).…”

“…To improve personal income tax compliance rate in Nigeria, the Nigerian government, as well as the tax authorities, have employed some economic factors like reduction or increase in tax rates, carrying out tax audits to detect non-compliant persons, as well as meting out penalties to tax offenders (Oladele et al, 2019). Also, Psychological factors like a reduction of tax burdens, provision of tax incentives, tax amnesties, as well as rewards for compliant citizens have been implemented (Oladele et al, 2019). Although the number of taxable adults in Nigeria increased from about 10 million to about 20 million people in 2018, tax compliance rate is still less than 20 percent, and comprises 4 percent of people whose taxes are not deducted at source and 96 percent of persons whose taxes are deducted at source (Osibanjo, 2018;Pricewaterhousecoopers-PWC, 2017).…”

“…Although the number of taxable adults in Nigeria increased from about 10 million to about 20 million people in 2018, tax compliance rate is still less than 20 percent, and comprises 4 percent of people whose taxes are not deducted at source and 96 percent of persons whose taxes are deducted at source (Osibanjo, 2018;Pricewaterhousecoopers-PWC, 2017). Some of the recent empirical research on economic factors for tax compliance in developing countries and Nigeria have found significant positive relationships (Oladele, Aribaba, Ahmodu & Yusuff, 2019;Olaoye & Ekundayo, 2019;Umar, Derashid, & Popoola, 2018;Alkahtib, Abdul-Jabbar & Marimutu, 2018). The other studies explained that psychological factors and a combination of economic and psychological factors drive tax compliance in developing countries, Nigeria inclusive (Koessler, Torgler, Feld, & Frey, 2019;;Umar, Ibrahim, Derashid & Bidin, 2019;;Ayuba, Saad, & Ariffin, 2018;Nikiema & Zahonogo, 2017;Mas'ud, Manaf, & Saad, 2014).…”

Peran penyuluhan pajak terhadap inefisiensi pemungutan pajak di Indonesia

“…(de Oliveira & Frascaroli, 2019;Herawati et al, 2021;Laksono & Widyawati, 2018;Oladele et al, 2019;Tsakasa & Katharakib, 2014).Kemudian dilakukan estimasi dengan stochastic frontier pada data panel. Analisis stochastic frontier mendefinisikan bentuk fungsinya dengan cobb-douglas dengan alasan (de Oliveira & Frascaroli, 2019): 1.…”