Impact of Tax Compliance on Standard of Living In Nigeria

  • Oladele Rotimi Federal university Oye Ekiti Ekiti state, Nigeria.Department of Accounting
Keywords: Tax Compliance, Human Capital Development, Per Capital Income, Economic Development

Abstract

This study examined the impact of tax compliance on economic development in Nigeria. The motivation for this study was primarily premised on the paucity of theoretical literature on tax compliance and economic development in Nigeria.

The specific objective was to examined the impact of  tax compliance on human capital development and the impact of tax compliance on per capital income in Nigeria .In trying to achieve this objective, A quantitative research design has been adopted having been found to be appropriate for the quantitative research model that underpins the study at hand through regression was adopted for the data analysis.

The results of the study indicate that the tax compliance have positive impact on economic development in a time series data of Nigeria’s Economy during 2003 – 2019. The linearity test revealed that linear relationship exists between tax compliance and standard of living in Nigeria. The research closes the knowledge gap induced by inconclusive evidence on the growth effects of human capital development and per capita income which most often have resulted in situations where results of researches done in developed economies are generalized to developing countries.

This study recommends that government should adhere strictly on compulsory tax compliance due to its effect on economic development prospect and its less distortionary nature, and also utilize the positive relationship between tax compliance and human capital development to realize efficient government investment that spurs economic growth.

References

Abata, M. A. (2014). The Impact of Tax Revenue on Nigerian Economy: Case of Federal Board of Inland Revenue. Journal of Policy and Development Studies, 1-9.
Abiola, J., & Moses, A. (2012). Impact of Tax Administration on Government Revenue in a Developing Economy- case study of Nigeria. International Journal of Business and Social Science, 3(8), 34-46.
Akintoye, I. R., & Dada, S. O. (2013). Tax Justice, Economic Growth and Development in Sub-Saharan Africa: Evidence from Nigeria. Journal of Management Policy, 3(5), 104-120.
Akintoye, I. R., & Tashie, G. A. (2013). The Effect of Tax Compliance on Economic Growth and Development in Nigeria, West-Africa. British Journal of Arts and Social Sciences, 11(11), 46-59.
Alabede, O. J., Zaimoh, Z. R., & Idris, K. M. (2011). Does Ethnicity Matter in Individual Taxpayers Compliance Behaviour?: Empirical evidence from Nigeria. Economic and Finance review, 1(18), 18-30.
Fischer, C. M., Wartick, M., & Mark, M. (1992). Detection probability and tax compliance: A review of the literature. Journal of Accounting Literature, 11(2), 24-46.
Ihenyen, C. J., & Mieseigha, E. G. (2014). Taxation as an Instrument of Economic Growth (The Nigerian Perspective). Information and Knowledge Management, 4(12), 14-20.
Kiabel, B. D., & Nwokah, N. G. (2009). Curbing tax evasion and avoidance in personal income tax administration: A study of the south-south states of Nigeria. European Journal of Economics, Finance and Administrative Sciences, 16-31.
Knack, M., & Keefer, A. (2012). Taxation of Income and Economic Growth: An Empirical Analysis of 25 Rich OECD Countries. Working Paper No. 2012:6.
Loizides, J., & George, V. (2005). Government Expenditure And Economic Growth: Evidence From Trivariate Causality Testing. Journal of Applied Economics, 1-8.
Murphy, K. (2003). An Examination of Taxpayers’ Attitutudes towards the Australian Tax System: Findings from a Survey of Tax Scheme Investor. Tax Forum, 18-34.
Nwakanma, P. C., & Nnamdi, K. C. (2013). Taxation and National Development. Research Journal of Finance and Accounting, 4(19), 176-180.
Ogbonna, G. N., & Ebimobowei, A. (2012). Impact of Tax Reforms and Economic Growth of Nigeria: A Time Series Analysis. Current Research Journal of Social Sciences, 4(1), 62-68.
Ojong, C. M., Anthony, C., & Arikpo, C. F. (2016). The Impact of Tax Revenue on Economic Growth: Evidence from Nigeria. IOSR Journal of Economics and Finance, 7(1), 32-38.
Olaoye, C. O., Asaolu, T. O., & Adewoye, J. O. (2009). A Review of Revenue Generation in Nigerian Local Government: A Case Study of Ekiti State. International Business Management, 3(3), 54-60.
Oluyombo, O. O., & Olayinka, O. M. (2018). Tax Compliance And Government Revenue Growth In Nigeria. Lapai International Journal of Administration, 1(2), 245-253.
Sani, A. (2005). Contentious issues in tax administration and policy in Nigeria.
Schneider, F. (2018). The Influence of the Economic Crisis on the Shadow Economy in Germany, Greece and Other OECD Countries in 2010: What Can Be Don.
Simanjuntak, O., & Mukhlis, G. (2011). The evolution and concept of tax compliance in Asia and Europe. Australian Journal of Basic and Applied Sciences, 5(11), 557-563.
Trostel, P. A. (1993). The Effect of Taxation on Human Capital. Journal of Political Economy, 101(2), 327-350.
Wambai, U. S., & Hanga, B. Y. (2013). Taxation and Societal Development in Nigeria: Tackling Kano's hidden economy. International Journal of Academic Research in Business and Social Sciences, 5(5), 113-125.
Published
2021-05-05
Section
Articles