TAX ENFORCEMENT STRATEGY: THE ANTIDOTE TO NON-TAX COMPLIANCE IN NORTH-WEST NIGERIA
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Date
2024
Journal Title
Journal ISSN
Volume Title
Publisher
Journal of Business Management and Accounting
Abstract
Voluntary SME tax compliance has been of great interest to
governments all over the world, given their unimpressive contribution
to total tax revenue. This is even more so in Nigeria where the
culture of tax compliance among SMEs can be described as poor,
requiring innovative enforcement strategies. This study examined
the extent to which tax enforcement strategies served as antidote to
non-tax compliance in the North-West Nigeria. The study collected
quantitative data from 345 randomly and purposively selected SMEs
owners duly registered in North-west, Nigeria. The data was subjected
to both descriptive and inferential analysis through techniques of
central tendency and multiple regressions. Results revealed that three
tax enforcement strategies: Use of tax clearance certificate (β=0.024
< 0.003), grant of tax amnesty (β=0.025< 0.020), and imposition of
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tax penalty (β = 0.013 < 0.014) have significant positive influence on
degree of tax compliance among SMEs in the North-West Nigeria.
Given the significant statistical evidence, this research inferred
and concluded that deployment of both punitive (tax penalty) and
persuasive measures (tax clearance certificate and tax amnesty) serve
as antidote to non-tax compliance among the SMEs in the North
West, Nigeria. The study shows that tax compliance across informal
sectors can be enhanced beyond the use of legal means. In essence,
governments have the leverage of achieving increase in tax revenue
in the informal sector through multiple strategies of motivation and
punishment as implicitly emphasized in the theory of tax morale and
deterrence theory.