Effect of Tax Audit on Voluntary Compliance and the Revenue of Lagos State

Sodiq Temitayo Ogundeko () and Khadijah Adeola Idowu

Academic Journal of Economic Studies, 2020, vol. 6, issue 3, 97-104

Abstract: Tax has become the major source of revenue to Lagos State most especially after the dwindling federal allocation due to a significant decline in oil revenue. The introduction of the self-assessment scheme in the State has the primary responsibility of fostering voluntary compliance among tax payers, reducing tax administration cost and increasing the tax revenue of the State. This study therefore set out to consider the effect of tax audit on voluntary compliance as it affects the level of revenue of the State. Two research objectives and hypotheses were formulated. The Ex-Post Facto Research design was adopted for the study and the data gathered from secondary sources were used. Data on Tax Audit, IGR, GDP and the Total Revenue of Lagos State spanning the periods 1999 -2018 was used for the study. Using the paired sampled T-Test of significance, the test of research Hypothesis One shows that the Tax Audit driven IGR significantly improve the Total Revenue of the State with a P-Value of 0.0000. The result of Hypothesis Two with a P-Value of 0.000 shows that Lagos State tax revenue is not significant when compared with the State GDP. The study however, recommended that more experienced tax consultants be engaged in the revenue generation processes and informal sector assessment programmes be strengthened.

Keywords: Tax Audit; Voluntary Compliance; Internally Generated Revenue; Lagos State Inland Revenue (search for similar items in EconPapers)
JEL-codes: C22 (search for similar items in EconPapers)
Date: 2020
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