Tag Archives: Tax Compliance

Fairness of Tax Laws and Regulations Influence on Tax Compliance in Tanzania: Lessons from SMEs in Arusha Tanzania (Published)

The purpose of the study was to assess the influence of fairness of tax laws and regulations on tax compliance in Tanzania taking SMES in Arusha city as a case study. Mixed approach and survey design were employed to conduct this study, where systematic and purposive sampling techniques were used to select 100 respondents to take part in the study. It was revealed that there is positive and significant influence on tax compliance. An adjusted R2 =59.6% while    F(8, 87) =28.86 P < 0.000 were revealed, implied that fairness of tax laws and regulations had positive and significant influence on tax compliance in Tanzania. It was recommended that tax legal framework in Tanzania should be improved; to include making assessment basing on reality of business in Tanzania and eliminates complexity in tax payment processes.

Citation: Maseko F.E and Sawe I E. (2022) Fairness of Tax Laws and Regulations Influence on Tax Compliance in Tanzania: Lessons from SMEs in Arusha Tanzania, European Journal of Accounting, Auditing and Finance Research, Vol.10, No. 11, pp.52-68

Keywords: Tax Compliance, Tax Evasion, fairness of tax laws and regulations, tax avoidance

Taxpayers Behaviour and Tax Compliance Outcomes: Function of Tax Justice in Nigeria (Published)

A successful fiscal policy particularly on tax administration is all about the efficiency, effectiveness and economy of tax compliance which measured by the compliance level. The objective for this study was to study the impact of Tax Justice on the taxpayers behaviour and consequential tax compliance. The principle of tax justice will be considered in the context of resolving a conflict of interest concern. This is because the contents of the tax system, particularly the determination of the level of tax charges and the regulations that apply to them, clearly demonstrate a contradiction between the interests of the government and those of the taxpayer. And it is in this framework that tax law must be supported in order to ensure that the contents of the tax system are of high quality. The primary data research design used with well-structured questionnaire distributed online through the WhatsApp platform and responses obtained from 163 respondents out of 220 distributed, representing a 72% response rate. SPSS was used for the descriptive and inferential statistical analysis using the regression estimation and testing the data for quality assurance. The study found out that there is a positive significant relationship between tax justice and voluntary compliance outcomes, revenue compliance outcomes and integrity compliance outcomes. The study thus concluded that tax justice significantly impacts on the taxpayers behaviour and consequent compliance with the tax obligations.

Keywords: Tax Compliance, ability to pay, capitulation, resistance and disenchantment, tax justice

Tax Education and Compliance in the Informal Sector of Ogun State Nigeria (Published)

Tax Education and  Compliance in Informal sector of Ogun State Nigeria is a combination that constitute a recognisable driving force for the development of an economy and the contribution of this sector cannot in any way be over-looked by any developing country particularly one that is struggling to diversify from oil revenue and improve tax  revenue. The efficiency or otherwise of tax education combined with the challenges of informal sector can make or mar the success of tax compliance and this is the focus of this study. The non-compliance in the informal sector is one of the critical factors affecting government revenue collection and hindering the provision of public goods and services as catalyst of development. The main objective of the study was to ascertain the effect of tax education on tax compliance of the informal sector in Ogun State.The study employed survey design. The population comprised six economic zones in Ogun State, centred on 2465 various applicable professional/technical association covering the various sub-sectors. The study adopted primary source of data with reliability result above 0.70 which suggests that the instrument used for evaluation was highly reliable. The Taro Yamane formula was used to obtain a sample size of 310 structured questionnaire while 240 responded. The study revealed that tax education has positive significant effect on taxpayer registration. Adj. R2= 0.97, (F-statistic= 0.97), p- value= 0.000 which is less than 0.05 adopted for this work.  The findings on returns shows that tax education has significant effect on timely filing of returns. Adj. R2= 0.98(F-statistic= 0.98) P- value= 0.000 which is less than 0.05 adopted for this work.  Tax education has significant effect on correct declaration of taxable income.  Adj. R2= 0.99, (F-statistic= 0.99), P- value= 0.000 which is less than 0.05 adopted for this work.   Tax education has significant effect on timely payment of assessed tax. Adj. R2= 0.98, (F-statistic= 0.98), P- value= 0.000 which is less than 0.05 adopted for this work.  Thus, the study concluded that tax education has significant effect on tax compliance in Ogun State. The study recommended that relief and taxpayer advocate should be encouraged to increase correct declaration of taxable income through well-structured tax education in the informal sector to improve tax compliance. Tax education should be encouraged by tax authorities as it has the potentials of affecting positively the taxpayer’s compliance.

 

Keywords: Tax Compliance, assessed tax, tax education, taxable income, taxpayers

Good Governance and Personal Income Tax Compliance in Nigeria. (Published)

This study is to examine the good governance and personal income tax compliance in Nigeria and study basically adopt the survey research design in which structured questionnaire is designed and distributed to the respondents as a means of gathering information. population of this study comprises of all the staff of Adekunle Ajasin University, Akungba-Akoko, Ondo State, Nigeria and the total number of staff as at 31st December, 2020 is one thousand four hundred and fifty (1450). The classes of personnel to be administered with the questionnaire include senior staff, junior staff and the management staff. Because of the sensitive nature of the study, and to ensure a credible and reliable data, the population cuts across all categories of workers. with the sample size of 314, a multiple regression model is specified in equation (i). This multiple regression econometric models explain the variation in the values of the dependent variable (Personal Income Tax Compliance) on the basis of change in other independent variables (Perception of tax payer of a good governance, Tax fairness). Panel Least Square (PLS) regression technique was used for the study. It was discovered that there is significant relationship between tax fairness and personal income tax in Nigeria and also there are perceptions of tax payers towards good governance and personal income tax compliance in the country. Specifically, tax fairness enhances the personal income tax compliance among the sampled respondents and perception tax payer of a good governance contribute significantly to the personal income tax compliance. The study concluded that if tax fairness is well enhanced, tax payer will be highly interested in paying their personal income tax. The problem of lack of compliance is common among the informal sector who often bear the brunt of the bad governance.  It is obvious that tax compliance will increase if good governance can be perceived by the people. Respondents are ready to comply with the law but the revenue collected must be judiciously used.

Keywords: Good Governance, Tax Compliance, perception of tax payers, personal income tax, tax fairness

Electronic Taxation and Tax Compliance among Some Selected Fast Food Restaurants in Lagos State, Nigeria (Tax Payers Perspective) (Published)

This study assessed the effect of level of awareness on electronic tax on tax compliance by small and medium scale enterprises (SMEs) in Lagos state; it also examined the effect of perceived ease of use on tax compliance and determined the effect of electronic tax filing system cost on tax compliance among SMEs in Lagos state; This was done with a view to determine the effect of electronic tax filing system on tax compliance among SMEs in Lagos state Nigeria. The study employed the survey research design. Data were collected from primary sources through the use of structured questionnaire distributed to the SMEs at their place of work. The population of the study consist of nine hundred and fifty (950) small and medium scale enterprises in Lagos state in the fast food restaurants sub sector. A sample size of two hundred and eighty-one was selected using the Taro Yamane formula. Data collected were analysed using descriptive statistics, structural equation model analysis and regression. Analysis of the study revealed that level of awareness (LOA) showed significant positive relationship with tax compliance (β= 0.276; t=2.689; p=0.008). It was also revealed that perceived ease of use (PEU) (β = 0.249; t= 2.331; p= 0.022) has a positive effect on tax compliance but was statically non-significant. The tax compliance cost (TCC) (β=-0.289; t= -2.568; p=0.012) showed a non-significant negative effect on tax compliance. The study therefore concludes that the level at which the tax payers are aware of the electronic tax filing system will determine their compliance rate and the compliance cost may discourage the tax payers from using the system if it is higher. Although the effect of ease of use is non-significant, the positive effect it has indicates that it has the potential to influence tax compliance. The study therefore recommends that government should increase its tax awareness efforts; review the electronic tax filing system to reduce cost of usage and provide a user friendly avenue for using the system.

Keywords: Perceived Ease of Use, Small and Medium Scale enterprises., Tax Compliance, electronic tax, electronic tax filing system cost, level of awareness

Effects of Tax Audit on Tax Compliance in Ekiti State, Nigeria (Published)

The paper examined the effects of tax audit on tax compliance in Ekiti State, Nigeria. The study employed primary data where 60 questionnaires were randomly distributed to Federal Inland Revenue Service and Ekiti State Board of Internal Revenue Service Staff. Multinomial Logistic Regression analysis was employed as the estimation technique. The findings revealed that the multinomial logistic regression model fitting information was significance with the p-value of 0.040 which implies that the tax audit can influence the tax compliance. Also, the likelihood ratio tests of multinomial regression showed that tax accuracy and current returns have not been significantly affecting tax compliance, that tax law has effect on tax compliance while tax procedure has no effect on tax compliance during the study period. The study concluded that tax audit is yet to make any substantial effect on tax compliance. It therefore recommended that the relevant tax authority at all levels should improve the standard of tax audit employed for effectiveness and efficiency and equally, relevant tax authority should provide a policy that would allow the tax payers to cooperate during the period of tax audit.

Keywords: Government Revenue, Tax, Tax Audit, Tax Compliance

Contemporary Issues in Corporate Income Tax in Nigeria – A Review of Precept and Practice (Published)

This study undertakes a review of contemporary issues in Corporate Income Tax practices in Nigeria against the background of Nigeria’s economy being generally characterized by low tax compliance and enforcement. All resident corporate entities are required to pay tax on all incomes or profits made by them from a source within and outside Nigeriato the federal government (CITA, 2007). However, if such corporate entities are resident outside Nigeria, only the income attributable to their operations in Nigeria is taxable. Low tax compliance is a matter of grave concern in many countries especially developing ones like Nigeria because it limits the capacity of their respective governments to raise revenues for development purposes. There is no gainsaying the fact that tax enforcement has become an essential aspect of tax administration in view of the ingenious ways corporate taxpayers undermine the revenue generation process by not remitting what is due to government (Gwangdi and Garba 2015). This study reviews extant provisions on tax reliefs and incentives applicable to corporate entities to facilitate voluntary compliance and recommendations are made on enhancing the successful implementation of theVoluntary Assets and Income Declaration Scheme (VAIDS) and improve the corporate income tax culture in order to enhance the gross domestic product

Keywords: Company Income Tax, Tax Compliance, and Tax Administration., the Economy

Demystifying the Key Taxation Concepts to Improve Compliance by Small and Medium Enterprises in Kenya (Published)

In Kenya, there exist small, medium (SMEs) and large enterprises but SMEs’ have been always regarded as the engines due to their immense contribution to the economy. Many reforms in taxation system in Kenya have been done to ensure that the government collects enough revenue to finance its ever increasing budget. However, taxation is still an uphill task among SMEs thus viewed to be complex and a burden. In this regard therefore, the study was guided by tax compliance theory while assessing the key taxation concepts which will increase compliance among Kenya’s SMEs. Using library research design, the study found out that SMEs in Kenya are in dire need of understanding the principal objective of taxation, taxation approaches, tax crimes and audits. However, the researcher recommends increased taxation sensitization by the main tax authority in Kenya (KRA) given the new reforms made. In addition, there is need to avail more knowledge to Kenya’s SMEs regarding factors affecting their tax compliance.

Keywords: SMEs, Tax Compliance, Tax Crimes, Tax audits, Taxation Approaches

THE SIZE OF THE TAX EVASION PROBLEMS ON SELF-EMPLOYMENT INCOME: AN EXAMINATION OF EFFECTS OF TAX POLICIES ON COMPLIANCE (Published)

Income tax evasion is a significant problem faced by most of the countries around the world. The phenomenon interferes with economic efficiency, socially desirable income distribution, long term economic growth, and price stability. Therefore, a reform strategy to increase tax compliance with a concerted, long term, coordinated, and comprehensive plan is required. It is also vital that tax administrators ensure that every compliance policy instrument at their disposal is use as effectively as possible. The intent of this study was to consider the implications of the increase of tax evasion which has been a source of big concern to policymakers. Issues, such as tax compliance costs and revenue maximizing taxation have also been analyzed. This paper pulls together the various strains of research to illustrate the current state of knowledge regarding the impacts of tax evasion on the economy and to identify areas in which additional research is particularly warranted.

Keywords: Eniola Agbi, Sam Agbi, Self Employment Income, Tax Compliance, Tax Evasion Problem, Underground Economy