INFORMAL SECTOR TAXPAYERS' PERCEPTION OF INFLUENCE OF GOVERNMENT ACCOUNTABILITY ON VOLUNTARY TAX COMPLIANCE AND THE MODERATING ROLE OF FISCAL EXCHANGE

Julius Olatunde Otusanya, Babatunde Gbade Adeyeye and Lucky Ovienbor
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Julius Olatunde Otusanya: University of Lagos, Postal: Department of Accounting, Lagos, Nigeria
Babatunde Gbade Adeyeye: University of Lagos, Postal: Department of Accounting, Lagos, Nigeria
Lucky Ovienbor: Auchi Polytechnic, Postal: Department of Accountancy, Auchi, Edo State, Nigeria

International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF), 2019, vol. 08, issue 2, 1-20

Abstract: This study examines informal sector taxpayers' perception ofinfluence ofgovernment accountability on voluntary tax compliance and the moderating role of fiscal exchange in Edo State, Nigeria. The study is motivated by the quality ofpublic accountability, the level oftax compliance by informal sector operators and persistent budget deficit at all levels ofgovernments in Nigeria. Primarydata are utilised for the study. The study adopts cross-sectional survey research design. Nine hundred and nineteen (919) copies ofvalid questionnaire were used for the study; this represents approximately 73% ofthe respondents. The collected data were analysed using both descriptive and inferential statistics. The proposedhypotheses forthe studywere testedusing regression analysis. Results ofthe studyindicate that government accountability has positive significant influence on voluntary tax compliance. The results showed that government accountability alone could account for 16.3% of the variation in voluntarytax compliance.Anotherinteresting revelation ofthe studyis that the results furtherindicated positive substantialincrease in the levelofvoluntarytax compliance from 16.3% to 31.7% as a resultof the interaction of fiscal exchange and government accountability. The study has also provided evidence to show that there is low level of voluntary tax compliance in Edo State informal sector. The study concludes that fiscal exchange is more influential in encouraging taxpayers' willingness to comply with tax laws and regulation. It is, therefore, recommended that Edo State government should be accountable, transparent and strive for excellence in the delivery of quality public goods and services in order to encourage voluntary tax compliance in informal sector.

Keywords: Tax; Government; Accountability; Fiscal exchange theory; Moderator; Voluntary compliance (search for similar items in EconPapers)
Date: 2019
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