Effects of Transfer- Pricing Regulations and Compliance on Tax Administration in Nigeria

Gideon Tayo Akinleye (), Clement Olatunji Olaoye () and Bamikole Samson Fajuyagbe ()
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Gideon Tayo Akinleye: Ekiti State University
Clement Olatunji Olaoye: Ekiti State University
Bamikole Samson Fajuyagbe: Ekiti State University

Acta Universitatis Danubius. OEconomica, 2018, issue 14(5), 86-97

Abstract: This paper examines the effects of transfer- pricing regulation and compliance on tax administration in Nigeria. The paper uses a descriptive survey research design. Questionnaire was used as the research instrument for data collection. Analyses were made with ordered logit regression, Pearson product moment correlation, variance inflation factor (VIF) and white heteroskedasticity test. Ordered logit regression reveals that transfer- pricing regulation had a tendency to significantly influence tax administration with z-values of 2.8931 (p=0.00381) while transfer- pricing compliance had an insignificant effect of 0.016 with z-values of 0.1335 (p=0.89379) on tax administration in Nigeria at likelihood ratio test of Chi-square (2)= 25.7916 [0.0000]. This study implies that transferpricing and its compliance has the capacity to improve the effectiveness and efficiency of tax administration in Nigeria. Hence, we concluded that there is poor administration of transfer- pricing tax policy in Nigeria. It is, therefore, recommended that Federal Inland Revenue Service should put in place not only transfer- pricing laws but adequate machinery in terms of human and technological capital coupled with sensitization on the applicability of the existing transfer- pricing tax policy in Nigeria.

Keywords: Transfer- pricing; Regulation; Compliance; Tax Administration (search for similar items in EconPapers)
Date: 2018
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