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Analysis of the Factors Affecting Tax Compliance Among Small and Medium Enterprises in Nigeria

김정호|Afo Simon Afo
지역개발연구소 (The Center for Regional Development)|2022.04|지역개발연구 (The Studies in Regional Development) (The Studies in Regional Development)|제54권 제1호|pp. 99-134|DOI 10.35526/srd.2022.54.1.005

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AHPSMEsNigeriaTax EvasionVoluntary Tax Compliance

초록

Tax compliance has emerged as a major priority in Nigeria’s tax reform efforts. The government has undertaken various measures to encourage small and medium-sized businesses to pay taxes and to improve overall tax compliance. However, the percentage of compliance is rather low. This paper specifically identifies the most important variables influencing SMEs’ tax compliance in Nigeria, as well as the most effective techniques for increasing voluntary compliance. An online survey was conducted to gather first-hand data from tax experts to identify the more important factors in SMEs’ tax compliance. In this study, the Analytic Hierarchy Process (AHP) methodology was employed to analyze the data collected. Three factors were established to have an impact statistically on their desire to file tax returns, tax fairness and equity, tax rates, and knowledge of electronic tax filing. The results indicated tax fairness and equity as the most important factor. Nigerian tax authorities may improve SME compliance by following the canons of a fair tax, encouraging a positive attitude toward taxes, implementing awareness programs, and employing more skilled workers for audit exercises. The findings of this paper are expected to have significant ramifications for tax policy reform in Nigeria and other developing countries.

Abstract

Tax compliance has emerged as a major priority in Nigeria’s tax reform efforts. The government has undertaken various measures to encourage small and medium-sized businesses to pay taxes and to improve overall tax compliance. However, the percentage of compliance is rather low. This paper specifically identifies the most important variables influencing SMEs’ tax compliance in Nigeria, as well as the most effective techniques for increasing voluntary compliance. An online survey was conducted to gather first-hand data from tax experts to identify the more important factors in SMEs’ tax compliance. In this study, the Analytic Hierarchy Process (AHP) methodology was employed to analyze the data collected. Three factors were established to have an impact statistically on their desire to file tax returns, tax fairness and equity, tax rates, and knowledge of electronic tax filing. The results indicated tax fairness and equity as the most important factor. Nigerian tax authorities may improve SME compliance by following the canons of a fair tax, encouraging a positive attitude toward taxes, implementing awareness programs, and employing more skilled workers for audit exercises. The findings of this paper are expected to have significant ramifications for tax policy reform in Nigeria and other developing countries.

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