TAX REFORM AND TAX COMPLIANCE BEHAVIOR OF COMPANIES IN NIGERIA

Clement Okeke

Journal of Taxation and Economic Development, 2023, vol. 22, issue 1, 19-41

Abstract: This study examined Tax Reforms and Tax Compliance Behaviour of Companies in Nigeria. The main objective of this study was to examine the impact of corporate tax reforms on compliance. Recent studies on tax compliance have been based on social and psychological theories relating to attitude and taxpayer behaviour however little is known about the various effects of the previous tax reforms on corporate taxpayer compliance from an economic perspective highlighting a Nigerian case. The Nigerian corporate tax has undergone various historic reforms since early 1990; this study specifically investigated the impact of Companies Income Tax Reform of 2007 on corporate tax compliance behaviours. The study used ex-post facto research design. Secondary data were used. Data for total annual company income tax paid and the total GDP for the respective period of study were extracted from National Bureau of Statistics records. The study covers a period of twenty years (ten years [1997-2006] before and ten years [2008-2017] after the corporate tax reform of 2007). Statistical Analysis adopted in the study was Wilcoxon Rank Sum Tests. The study found that the rate of corporate tax compliance in Nigeria after the Companies Income Tax reform of 2007 was higher than the compliance rate before the reform. This supports the thinking that the CIT reform in 2007 brought about increased Companies Income Tax generation to the nation. The study, therefore, recommended that government needs to develop robust tax reforms and implement fiscal policy measures which encourage voluntary tax compliance.

Keywords: Compliance Behaviour; Tax Reform; Political Support; Fiscal Contract Enforcement (search for similar items in EconPapers)
JEL-codes: H20 H25 (search for similar items in EconPapers)
Date: 2023
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Working Paper: Tax Reform and Tax Compliance Behaviour of Companies in Nigeria (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jotaed:0071

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