Analysis of tax morale and tax compliance in nigeria

Project Abstract

Tax morale and tax compliance are critical issues in the context of revenue generation and economic development in Nigeria. This research aims to analyze the factors influencing tax morale and tax compliance among individuals and businesses in the country. The study will employ a mixed-methods approach, combining quantitative surveys and qualitative interviews to gather data from a diverse sample of taxpayers. The research will investigate the role of trust in government institutions, perceptions of fairness in the tax system, and social norms in shaping tax morale among Nigerian taxpayers. Additionally, the study will examine the impact of tax education and awareness campaigns on compliance behavior. By exploring these factors, the research seeks to provide insights into how tax morale can be enhanced to improve overall tax compliance rates in Nigeria. The findings of this study are expected to have important implications for policymakers, tax authorities, and other stakeholders involved in revenue mobilization efforts in Nigeria. By understanding the drivers of tax morale and compliance, policymakers can design more effective strategies to increase voluntary tax compliance and reduce tax evasion in the country. Furthermore, the research will contribute to the existing literature on tax compliance behavior in developing countries, particularly in the context of sub-Saharan Africa. Overall, this research project will shed light on the complex interplay of factors that influence tax morale and compliance in Nigeria. By examining the attitudes, perceptions, and behaviors of taxpayers, the study aims to provide valuable insights that can inform evidence-based policy decisions aimed at enhancing revenue collection and promoting sustainable economic growth in the country.

Project Overview

<p> </p><p><strong>Background to the study</strong></p><p>The importance of taxation in the activities of any government cannot be overemphasized. This is due to the fact that tax plays a pivotal role in generating revenue for the government, however, not every national government have been able to effectively exploit this great opportunity of revenue generation (Anyaduba et al 2012:37). The level of tax compliance in Nigeria has been a popular topic of discourse and it has been said that several efforts of government to increase the compliance of citizens towards tax payment have proved abortive. According to Ubesi and Edeh (2016:60), tax is a compulsory contribution imposed by government against the income, profits, wealth, property, and consumption of individuals and corporate organizations to enable government obtain the required revenue to provide basic amenities, security, and well-being of the citizens.</p><p>Tax morale is a very important and integral attitude that impacts on tax compliance. According to (Torgler 2002) cited in (Ubesi and Edeh 2016:61), tax morale is defined as the intrinsic motivation to pay taxes. They stress its relevance to understand the high observed level of compliance.High tax morale is required from the taxpayer in order to achieve a high degree of tax compliance. taxation is one of the most volatile subjects in governance both in the developing and developed countries. It has been established that there is a positive relationship between tax morale and tax compliance in Nigeria, that is, the higher the intrinsic motivation to pay tax, the higher the tax compliance. However, it has been discovered that a lot of factors tend to influence tax morale and tax compliance in Nigeria among which is the government performance. Some researchers have in fact defined tax as a compulsory contribution imposed by government and while taxpayers may receive nothing identifiable in return for their contribution.</p><p><strong>Statement of the problem</strong></p><p>Over the years, tax compliance has been a major issue Nigerian government has faced. This is due to the fact that some citizens don’t pay tax while the ones that pay either don’t pay the complete amount or they don’t pay on time. Low tax compliance is a matter of serious concern in many developing countries especially Nigeria given the fact that it limits the capacity of the government to raise revenue for developmental purposes (Ubesi and Edeh 2016:60). This has made this topic well documented, however, much emphasis haven’t been on analysing tax morale in Nigeria. Hence, the study intends to fill the gap in the literature by making a comprehensive analysis of tax morale and tax college in Nigeria. This will explain the tax morale of Nigerian citizens and their level of compliance to payment of tax.</p><p><strong>Objectives of the study</strong></p><p>The main objective of this study is to analyse tax morale and tax compliance in Nigeria. In order to achieve this, the study aims to achieve the following specific objectives:</p><p>1.) To determine the extent to which tax morale have effect on tax compliance.</p><p>2.) To understand the factors that affect tax morale in Nigeria</p><p>3.) To examine the effect of the Nigerian tax system on tax morale of taxpayers.</p><p>4.) To ascertain the effect of trust in government on tax compliance.</p><p><strong>Research Questions</strong></p><p>1.) What is the significant effect of tax morale on tax compliance in Nigeria.</p><p>2.) What determines the tax morale of Nigerian citizens</p><p>3.) How would trust in Nigerian tax system affect tax compliance and to what extent has it affected it in Nigeria?</p><p><strong>Scope of the study</strong></p><p>This study gives a broad analysis of tax morale and compliance in Nigeria. It covers factors that influence the tax morale of citizens and further explains how these factors have affected their compliance to tax payment.</p><p><strong>Significance of the study</strong></p><p>This study is very important as it plays an important role in shedding light to the non-economic factors that affect tax compliance, hence helping government to pay attention to the factors that influence the willingness of citizens to pay tax and improve on them, thereby improving people’s’ willingness to pay tax, government revenue and economic growth and development of the nation in general.</p><p><strong>Research Hypothesis</strong></p><p>1.) There is no significant relationship between tax morale and tax compliance in Nigeria</p><p>2.) There is significant relationship between tax morale and tax compliance in Nigeria.</p><p><strong>Limitation of the study</strong></p><p>Given the fact that the topic of taxation is not a topic that people have interest in, there was constraint in gathering materials. There is issue of secrecy in releasing information and also less interest in giving response to questions in a bid to gather data.</p><p><strong>Definition of terms</strong></p><p>Tax is defined as a compulsory levy imposed on citizens in order to generate revenue for the government.</p><p>Tax morale- refers to the intrinsic motivation to pay tax.</p><p>Tax compliance- refers to the reporting of tax liability to the relevant authority in compliance with applicable tax laws, regulation and court. It can also be defined as a process in which taxpayers file all the required tax returns by declaring all income accurately and paying the exact tax liability using applicable tax laws and regulation (Abdusalam et al 2014: 23)</p><p><strong>References</strong></p><p>1.) Abdulsalam M., Aliyu A., and Gambo E. (2014), “Tax Rate and Tax compliance in Africa” European Journal of Accounting Auditing and Finance Research 2(3): 22-30</p><p>2.) Akintoye, I and Tashie, G. (2013), “The Effect of Tax Compliance on Economic Growth and Development in Nigeria, West Africa” British Journal of Arts and Social Sciences, 2(2): 222-231.</p><p>3.) Anyaduba J., Eragbhe E., and Kennedy M. (2012), “Deterrent Tax Measures and Tax Compliance in Nigeria”, European Journal of Business and Management 4(11): 37-45.</p><p>4.) Ubesi, M. and Edeh,C.(2016), “Effect of Tax Morale and Tax Compliance in Revenue Generation in Nigeria” IDOSR Journal of Scientific Research 1(1): 59-80.</p> <br><p></p>