Tax audit and its effect on tax compliance of MSMEs in Nigeria

Abdulhamid Ellawule (), Yusuf Maiwada Bashir (), Bala Sulaiman Dalhat () and Naziru Suleiman ()
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Abdulhamid Ellawule: Abubakar Tafawa Balewa University
Yusuf Maiwada Bashir: Abubakar Tafawa Balewa University
Bala Sulaiman Dalhat: Abubakar Tafawa Balewa University
Naziru Suleiman: Abubakar Tafawa Balewa University

The Journal of Accounting and Management, 2024, issue 1(14), 60-73

Abstract: The self-assessment regime comes with a lot of challenges in the tax system. One of the problems is tax compliance problem. This study, therefore, investigated the effect tax audits have on tax compliance of Micro, Small and Medium Enterprises (MSMEs) in Nigeria. Five hundred (500) MSMEs were selected for the study and the regression technique through Statistical Package for Social Sciences (SPSS) was adopted for the analysis. The study found that tax audits do have a significant effect on the tax compliance of MSMEs in Nigeria. Also, intentional tax fraud investigation and enterprise tax return verification both have a significant effect on the tax compliance of MSMEs in Nigeria. Most of the local government revenue collectors or their agents have little or no adequate technical know-how to carry out tax audits on the businesses when the integrity of the books of account of the businesses is in doubt. To improve the tax base of the country, the government should train and retrain the tax authority staff and their agents to enhance their capacities in carrying out their assignment of collecting revenue and tax audits when the need arises.

Keywords: Tax audits; tax compliance; micro; small and medium enterprises (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:dug:jaccma:y:2024:i:1:p:60-73

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