Tax Regulations and Compliance in Ondo State, Nigeria
Keywords:
Tax audit, Tax bracket, Tax compliance, Tax regulations and penalties
Abstract
Scholars opined that low rate of tax compliance has been recorded because the regulations of tax matters were not appropriate. There is therefore the need to investigate the effect of tax regulation on tax compliance in Ondo State, while focusing on government use of fines and penalties, tax audit and tax bracket as tax regulatory tools to increase tax compliance. Survey research design was adopted as structured questionnaire was administered on staff of Ondo State Internal Revenue Service (ODIRS). 338 persons who are staff of ODIRS by 2019-year end form the study population while 137 persons who are the category of senior staff cadre with minimum of 5 years’ experience were purposively selected. Data gathered were analysed using descriptive statistics such as frequency, percentages and Step wise regression analysis was also used to assess the joint effect of tax penalty, tax rate and tax audit on tax compliance. The findings revealed that tax penalty and tax rate have positive and significant effects on tax compliance while tax audit has negative and insignificant relationship with tax compliance in Ondo state. It is therefore recommended that Ondo State Internal Revenue Service (ODIRS) should engage adequate well trained and highly motivated staff with effective regulatory measures as e-tax filling to ensure taxpayers compliance and employ efficient tax audit techniques to capture more citizens in the tax net and boost the state government internally generated revenue.
References
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Aladejebi, O. (2018). Measuring tax compliance among small and medium enterprises in Nigeria. International Journal of Accounting and Taxation, 6(2), 29-40. https://doi.org/10.15640/IJAT.V6N2A4
Alligham, M. G. & Sandmo, A. (1972). Income tax evasion: A theoretical analysis. Journal of Public Economics, 1, 323-338.
Aribaba, F.O., Oladele, R., Ahmodu, A.L., & Yusuff, S.A. (2019). Tax policies and entrepreneurship sustainability in Ondo State, Nigeria. Journal of Global Entrepreneurship Research, 9(53), 1-13. https://doi.org/10.1186/s40497-019-0168-0
Anyaduba, J. O., Eragbhe, E., & Kennedy, M. (2012). Deterrent tax measures and tax compliance in Nigeria. European Journal of Business and Management, 4(11), 37-45.
Atawodi, O.W., & Ojeka, S. (2012). Factors that affect tax compliance among small and medium enterprises in North Central. International Journal of Business and Management, 7(12), 87-96.
Ayuba, A., Saad, N., & Ariffin, Z.Z. (2018). Testing the assumptions of slippery slope framework on tax compliance: Evidence from Nigerian SMEs Augustine. De La Salle University (DLSU) Business & Economics Review, 27(2), 166-178.
Barbuta-Misu, N. (2011). A review of factors for tax compliance. Annals of “Dunarea de Jos” University of Galati Fascicle . 17(1), 69-76.
Benk, S., Cakmak, A. F., & Budak, T. (2011). An investigation of tax compliance intention: A theory of planned behavior approach. European Journal of Economics, Finance and Administrative Sciences, 28(28), 180-188.
Dlamini, B. (2017). Determinants of tax non-compliance among small and medium enterprises in Zimbabwe. Journal of Economics and Behavioral Studies, 9(4), 242-250.
Doran, M. (2009). Tax penalties and tax compliance. Harvard Journal. on Legislation., 46, 111.
Eric, L.C. (2006). Tax knowledge, tax structure and compliance: A report on a quasi-experiment. New Zealand Journal of Taxation Law and Policy, 12(2), 117 – 140.
Fadzilah, E. N., Mustafa, R. M., & Putri, N. K. (2017). The effect of tax understanding, tax payness consciousness, quality of tax service, and tax sanctions on compulsory tax of smes in Banyumas. Acta Universitatis Danubius. Œconomica, 13(4), 28 – 38.
Francois, S.L. (2021). Tax free synthetic cash for individuals: A theoretical review of the Swiss case. Journal of Accounting and taxation, 13(1), 45-58.
Gberegbe, F. B., & Umoren, A. O. (2017). The perception of tax fairness and personal income tax compliance of SMEs in Rivers State. Journal of Research in Business and Management, 5(2), 40-51.
Gebreyesu, S.A. (2020) Assessment of tax audit practice and its challenges. A case study of Ethiopian revenue and custom authority large taxpayers. International Journal of Innovative Science and Research Technology. 5(1), 805 -812.
Hai, O.T., & See, L.M. (2011). Intention of tax non-compliance-examine the gaps. International Journal of Business and Social Science, 2(7), 79-83. Retrieved from http://www.ijbssnet.com/journals/Vol._2_No._7%3B_Special_Issue_April_2011/9.pdf
Ibnee, H., Ahmed, N and Sidra, G (2021) Voluntary tax compliance behaviour of individual taxpayers in Pakistan. Journal of Accounting and Taxation, 12(1), 206-210.
Irwan, K.M., & Apollo, D. (2021). The effect of tax sanctions and tax authorities service on tax compliance and taxpayer awareness as moderation variable (survey on corporate taxpayers domicild in Tangerang). Dinasti International Journal of Management Sciences, 2(3), 371-380.
James, S., & Alley, C. (2004) Tax compliance, self-assessment and tax administration. Journal of Financial and Management in Public Services, 2, 27-42.
Kirchler, E., Hoelzl, E., & Wahl ,I. (2008).¬ Enforced versus voluntary tax compliance: The ‘‘slippery slope’’ framework. Journal of Economic Psychology, 29, 210–225.
Kolawole1, A.D., & Owolabi, O.A. (2021). T ax audit and taxpayers’ compliance in Southwest Nigeria. Psychology and education, 58(2), 10246-10254
Koumanakos, E., Roumelis, T., & Goletsis, Y. (2017). Corporate tax compliance during macroeconomic fluctuations. Journal of Accounting and Taxation, 9(4), 36-55.
Maina, L.N., & Kiragu, D.N. (2017). Influence of tax regulations enforcement on tax compliance by agri-business small and micro enterprises in Nyeri county Kenya. Scholars Bulletin, 3(6), 248-252. DOI: 10.21276/sb
Mas’ud, A., Aliyu, A. A., Gambo, E. J., Al-Qudah, A. A., & Al Sharari, N. (2014). Tax rate and tax compliance in Africa. European Journal of Accounting Auditing and Finance Research, 2(3), 22-30.
Mas’ud, A., Manaf, N.A.A., & Saad, N. (2019). Trust and power as predictors to tax compliance: Global evidence. Economics and Sociology, 12(2), 192-204. doi:10.14254/2071-789X.2019/12-2/11
Modugu, K. P., & Anyaduba, J. O. (2014). Impact of tax audit on tax compliance in Nigeria. International Journal of Business and Social Science, 5(9), 207-215.
Nkwe, N. (2013). Tax payers’ attitude and compliance behavior among small medium enterprises (SMEs) in Botswana. Business and Management Horizons, 1(1), 113-137.
Oghuma, R.I. (2018). Tax audit, penalty and tax compliance in Nigeria. 4th ICAN International Academic Conference Proceedings, 559 -571. Retrieved from http://icanig.org/ican/documents/4TH-ICAN-conference-proceedings-2018.pdf.
Ojonta, B.A. (2011). Tax audit and investigation in Enugu State, Nigeria, Unpublished dissertation of University of Nigeria Nsukka. Last accessed 8th July, 2021. Retrieved from http://repository.unn.edu.ng/handle/123456789/3255
Okonkwo, A.I. (2014). Critical evaluation of tax audit and investigation processes in enhancing tax compliance: Being a paper presented at the CITN MPTP in Uyo on October 8-9.
Okpeyo, E.T., Musah, A. & Gakpetor, E.D. (2019). Determinants of tax compliance in Ghana. Journal of Applied Accounting and Taxation, 4(1), 1-14.
Oladele, R., Aribaba, F., Ahmodu, A., Yusuff, S., & Alade, M. (2019). Tax enforcement tools and tax compliance in Ondo State, Nigeria. Academic Journal of Interdisciplinary Studies, 8(2), 27 -38.
Oladipupo, A.O. & Obazee, U. (2016). Tax knowledge, penalties and tax compliance in small and medium scale enterprises in Nigeria. I Business, 8, 1-9. DOI: 10.4236/ib.2016.81001
Olaoye, C.O., & Ekundayo, A.T. (2018). Effects of tax audit on tax compliance in Ekiti State, Nigeria. European Journal of Accounting, Auditing and Finance Research, 6(5), 13-19.
Olokooba, S. M., Awodun, M., Akintoye, O.D., & Adebowale, H.I. (2018). Tax offences: Clogs in the wheel of progress and development of Nigeria as a nation. International Journal of Law and Jurisprudence, 9(1), 226-236.
Osakwe, J. O. (1999). Recent reform in personal income taxation in Nigeria. Central Bank of Nigeria’s Economic and Financial Review, 37 (3), 18-43.
Richardson, G. (2008). The relationship between culture and tax evasion across countries: Additional evidence and extensions. Journal of International Accounting, Auditing and Taxation, 17(2), 67-78.
Soyinka, K.A., Jinadu, O., & Sunday, O.M. (2016). Tax audit determinants and corporate tax compliance in Nigeria. The international journal of business & management 4(5), 95-99.
Tilahun, M. (2019). Determinants of tax compliance: a systematic review. Journal of Economics, 8(1), 1-7.
Tilahun, M. (2018). Economic and social factors of voluntary tax compliance: Evidence from Bahirdar city. International Journal of Account, 6(2), 182-189.
Tsikas, S. A. (2017). Enforce tax compliance, but cautiously: The role of trust in authorities and power of authorities. Hannover Economic Papers (HEP) dp-589, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät. Retrieved from http://diskussionspapiere.wiwi.uni-hannover.de/pdf_bib/dp-589.pdf
Trivedi, V. U., Shehata, M., & Mestelman, S. (2005). Attitudes, incentives, and tax compliance. Canon of Taxation Journal, 53, 29.
Twesige, D & Gasheja, F. (2019). Effect of tax incentives on the growth of small and medium-sized enterprises (SMEs) in Rwanda: A case study of SMEs in Nyarugenge district. Journal of Accounting and Taxation. 11(5), 89-98.
Uremadu, S.O. & Ndulue, J. C. (2011). A review of private sector tax revenue generation at local government level: Evidence from Nigeria, Journal of Public Administration and Policy Research, 3(6), 174-183.
Yayuk, N.R., Margono, S., & Sudjatno, E.T. (2017). The role of taxpayer awareness, tax regulation and understanding in taxpayer compliance. Journal of Accounting and Taxation, 9(10), 139-146. DOI: 10.5897/JAT2017.0267
Aladejebi, O. (2018). Measuring tax compliance among small and medium enterprises in Nigeria. International Journal of Accounting and Taxation, 6(2), 29-40. https://doi.org/10.15640/IJAT.V6N2A4
Alligham, M. G. & Sandmo, A. (1972). Income tax evasion: A theoretical analysis. Journal of Public Economics, 1, 323-338.
Aribaba, F.O., Oladele, R., Ahmodu, A.L., & Yusuff, S.A. (2019). Tax policies and entrepreneurship sustainability in Ondo State, Nigeria. Journal of Global Entrepreneurship Research, 9(53), 1-13. https://doi.org/10.1186/s40497-019-0168-0
Anyaduba, J. O., Eragbhe, E., & Kennedy, M. (2012). Deterrent tax measures and tax compliance in Nigeria. European Journal of Business and Management, 4(11), 37-45.
Atawodi, O.W., & Ojeka, S. (2012). Factors that affect tax compliance among small and medium enterprises in North Central. International Journal of Business and Management, 7(12), 87-96.
Ayuba, A., Saad, N., & Ariffin, Z.Z. (2018). Testing the assumptions of slippery slope framework on tax compliance: Evidence from Nigerian SMEs Augustine. De La Salle University (DLSU) Business & Economics Review, 27(2), 166-178.
Barbuta-Misu, N. (2011). A review of factors for tax compliance. Annals of “Dunarea de Jos” University of Galati Fascicle . 17(1), 69-76.
Benk, S., Cakmak, A. F., & Budak, T. (2011). An investigation of tax compliance intention: A theory of planned behavior approach. European Journal of Economics, Finance and Administrative Sciences, 28(28), 180-188.
Dlamini, B. (2017). Determinants of tax non-compliance among small and medium enterprises in Zimbabwe. Journal of Economics and Behavioral Studies, 9(4), 242-250.
Doran, M. (2009). Tax penalties and tax compliance. Harvard Journal. on Legislation., 46, 111.
Eric, L.C. (2006). Tax knowledge, tax structure and compliance: A report on a quasi-experiment. New Zealand Journal of Taxation Law and Policy, 12(2), 117 – 140.
Fadzilah, E. N., Mustafa, R. M., & Putri, N. K. (2017). The effect of tax understanding, tax payness consciousness, quality of tax service, and tax sanctions on compulsory tax of smes in Banyumas. Acta Universitatis Danubius. Œconomica, 13(4), 28 – 38.
Francois, S.L. (2021). Tax free synthetic cash for individuals: A theoretical review of the Swiss case. Journal of Accounting and taxation, 13(1), 45-58.
Gberegbe, F. B., & Umoren, A. O. (2017). The perception of tax fairness and personal income tax compliance of SMEs in Rivers State. Journal of Research in Business and Management, 5(2), 40-51.
Gebreyesu, S.A. (2020) Assessment of tax audit practice and its challenges. A case study of Ethiopian revenue and custom authority large taxpayers. International Journal of Innovative Science and Research Technology. 5(1), 805 -812.
Hai, O.T., & See, L.M. (2011). Intention of tax non-compliance-examine the gaps. International Journal of Business and Social Science, 2(7), 79-83. Retrieved from http://www.ijbssnet.com/journals/Vol._2_No._7%3B_Special_Issue_April_2011/9.pdf
Ibnee, H., Ahmed, N and Sidra, G (2021) Voluntary tax compliance behaviour of individual taxpayers in Pakistan. Journal of Accounting and Taxation, 12(1), 206-210.
Irwan, K.M., & Apollo, D. (2021). The effect of tax sanctions and tax authorities service on tax compliance and taxpayer awareness as moderation variable (survey on corporate taxpayers domicild in Tangerang). Dinasti International Journal of Management Sciences, 2(3), 371-380.
James, S., & Alley, C. (2004) Tax compliance, self-assessment and tax administration. Journal of Financial and Management in Public Services, 2, 27-42.
Kirchler, E., Hoelzl, E., & Wahl ,I. (2008).¬ Enforced versus voluntary tax compliance: The ‘‘slippery slope’’ framework. Journal of Economic Psychology, 29, 210–225.
Kolawole1, A.D., & Owolabi, O.A. (2021). T ax audit and taxpayers’ compliance in Southwest Nigeria. Psychology and education, 58(2), 10246-10254
Koumanakos, E., Roumelis, T., & Goletsis, Y. (2017). Corporate tax compliance during macroeconomic fluctuations. Journal of Accounting and Taxation, 9(4), 36-55.
Maina, L.N., & Kiragu, D.N. (2017). Influence of tax regulations enforcement on tax compliance by agri-business small and micro enterprises in Nyeri county Kenya. Scholars Bulletin, 3(6), 248-252. DOI: 10.21276/sb
Mas’ud, A., Aliyu, A. A., Gambo, E. J., Al-Qudah, A. A., & Al Sharari, N. (2014). Tax rate and tax compliance in Africa. European Journal of Accounting Auditing and Finance Research, 2(3), 22-30.
Mas’ud, A., Manaf, N.A.A., & Saad, N. (2019). Trust and power as predictors to tax compliance: Global evidence. Economics and Sociology, 12(2), 192-204. doi:10.14254/2071-789X.2019/12-2/11
Modugu, K. P., & Anyaduba, J. O. (2014). Impact of tax audit on tax compliance in Nigeria. International Journal of Business and Social Science, 5(9), 207-215.
Nkwe, N. (2013). Tax payers’ attitude and compliance behavior among small medium enterprises (SMEs) in Botswana. Business and Management Horizons, 1(1), 113-137.
Oghuma, R.I. (2018). Tax audit, penalty and tax compliance in Nigeria. 4th ICAN International Academic Conference Proceedings, 559 -571. Retrieved from http://icanig.org/ican/documents/4TH-ICAN-conference-proceedings-2018.pdf.
Ojonta, B.A. (2011). Tax audit and investigation in Enugu State, Nigeria, Unpublished dissertation of University of Nigeria Nsukka. Last accessed 8th July, 2021. Retrieved from http://repository.unn.edu.ng/handle/123456789/3255
Okonkwo, A.I. (2014). Critical evaluation of tax audit and investigation processes in enhancing tax compliance: Being a paper presented at the CITN MPTP in Uyo on October 8-9.
Okpeyo, E.T., Musah, A. & Gakpetor, E.D. (2019). Determinants of tax compliance in Ghana. Journal of Applied Accounting and Taxation, 4(1), 1-14.
Oladele, R., Aribaba, F., Ahmodu, A., Yusuff, S., & Alade, M. (2019). Tax enforcement tools and tax compliance in Ondo State, Nigeria. Academic Journal of Interdisciplinary Studies, 8(2), 27 -38.
Oladipupo, A.O. & Obazee, U. (2016). Tax knowledge, penalties and tax compliance in small and medium scale enterprises in Nigeria. I Business, 8, 1-9. DOI: 10.4236/ib.2016.81001
Olaoye, C.O., & Ekundayo, A.T. (2018). Effects of tax audit on tax compliance in Ekiti State, Nigeria. European Journal of Accounting, Auditing and Finance Research, 6(5), 13-19.
Olokooba, S. M., Awodun, M., Akintoye, O.D., & Adebowale, H.I. (2018). Tax offences: Clogs in the wheel of progress and development of Nigeria as a nation. International Journal of Law and Jurisprudence, 9(1), 226-236.
Osakwe, J. O. (1999). Recent reform in personal income taxation in Nigeria. Central Bank of Nigeria’s Economic and Financial Review, 37 (3), 18-43.
Richardson, G. (2008). The relationship between culture and tax evasion across countries: Additional evidence and extensions. Journal of International Accounting, Auditing and Taxation, 17(2), 67-78.
Soyinka, K.A., Jinadu, O., & Sunday, O.M. (2016). Tax audit determinants and corporate tax compliance in Nigeria. The international journal of business & management 4(5), 95-99.
Tilahun, M. (2019). Determinants of tax compliance: a systematic review. Journal of Economics, 8(1), 1-7.
Tilahun, M. (2018). Economic and social factors of voluntary tax compliance: Evidence from Bahirdar city. International Journal of Account, 6(2), 182-189.
Tsikas, S. A. (2017). Enforce tax compliance, but cautiously: The role of trust in authorities and power of authorities. Hannover Economic Papers (HEP) dp-589, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät. Retrieved from http://diskussionspapiere.wiwi.uni-hannover.de/pdf_bib/dp-589.pdf
Trivedi, V. U., Shehata, M., & Mestelman, S. (2005). Attitudes, incentives, and tax compliance. Canon of Taxation Journal, 53, 29.
Twesige, D & Gasheja, F. (2019). Effect of tax incentives on the growth of small and medium-sized enterprises (SMEs) in Rwanda: A case study of SMEs in Nyarugenge district. Journal of Accounting and Taxation. 11(5), 89-98.
Uremadu, S.O. & Ndulue, J. C. (2011). A review of private sector tax revenue generation at local government level: Evidence from Nigeria, Journal of Public Administration and Policy Research, 3(6), 174-183.
Yayuk, N.R., Margono, S., & Sudjatno, E.T. (2017). The role of taxpayer awareness, tax regulation and understanding in taxpayer compliance. Journal of Accounting and Taxation, 9(10), 139-146. DOI: 10.5897/JAT2017.0267
Published
2022-01-22
How to Cite
ISENMILA, P. A., ADEGBAYIBI, A. T., & APALOWOWA, O. D. (2022). Tax Regulations and Compliance in Ondo State, Nigeria. Global Journal of Accounting, 7(2), 125-136. Retrieved from http://gja.unilag.edu.ng/article/view/1395
Section
Articles
