Moderating influence of religiosity on the causality between taxpaying attitudes and tax compliance behaviour of entrepreneurial firms in Nigeria

Lateef Ayodele Agbetunde, Lukman Raimi and Olalekan Oladipo Akinrinola

International Journal of Ethics and Systems, 2022, vol. 38, issue 3, 402-425

Abstract: Purpose - This paper aims to investigate the moderating influence of religiosity on the effect of taxpaying attitudes on the tax compliance behaviour of entrepreneurial firms in Nigeria. Design/methodology/approach - Using a cross-sectional survey design, we collected primary data from 368 owner managers of entrepreneurial firms in Southwest Nigeria using structured questionnaires. Respondents were purposefully selected based on the purposive sampling technique. The data collected with the structured questionnaires were analysed using descriptive and inferential statistics. Two linear regression models were compared. Findings - Estimations in Models 1 and 2 suggest that taxpayers’ attitudes and religiosity (intra- and interreligiosity) have significant effects on the tax compliance behaviour of firms, but the influence of intrareligiosity is insignificant. Estimations in Model 3 suggest that taxpaying attitudes without the moderating influence of religiosity exerted a significant effect on tax compliance behaviour by 13%, while taxpaying attitudes with the moderating influence of religiosity exerted 17%. Estimations in Model 4 suggest that taxpaying attitudes with the moderating influence of the interreligiosity dimension had a more significant contribution to the changes in tax compliance behaviour than the intrareligious dimension. Research limitations/implications - From the findings, the following policy implications can be deduced: (i) if taxpayers’ attitudes improved and religiosity was leveraged by the tax authorities, tax compliance behaviour of entrepreneurial firms would be induced in Nigeria; (ii) the consistent positive influence is a strong indication that religious values are critical elements of tax compliance interventions that should be considered by policymakers when designing public policies on tax evasion and avoidance in developing countries. Originality/value - We bridge the gaps in the literature because our study affirmed that taxes are religiously driven. In addition, the study validates the applicability of theory of planned behaviour in investigating the moderating influence of religiosity on the causality between taxpaying attitude and tax compliance in the developing context.

Keywords: Entrepreneurial firms; Religiosity; Tax compliance behaviour; Taxpaying attitudes (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijoesp:ijoes-07-2021-0152

DOI: 10.1108/IJOES-07-2021-0152

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