Government Accountability and Tax Compliance: The Nigeria Experience
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Date
2019
Journal Title
Journal ISSN
Volume Title
Publisher
Department of Accounting and Finance, Kwara State University, Malete
Abstract
Governments across the world are expected to bring real growth, development and good governance to their citizenry using different robust economic policies. One among the measures used is by ensuring that capital expenditure outweigh the recurrent expenditure. Financing government expenditure is typically tasking and a prominent opportunity available to the government in generating revenue is through taxes. Taxation is a major source of government revenue, however, not every national government are ready to effectively exploit this great opportunity of revenue generation. This may be attributed to variety of reasons among which are the system of taxation; tax legislation; tax administration and policy issues; over reliance on other sources of revenue (such as aid and grants); corrupt practices within the system – especially because it relates to the system of collection and behavior of citizens towards tax payment; and ease of tax payment. The willingness to pay tax, which can depend upon the aforementioned issues in tax-revenue generation, remains a key taxation-challenge everywhere in the world.
Accountability represents the very fact of being answerable and responsible; government accountability is one among the foundations of excellent governance and economic growth because it takes the shape of social welfare services provision. Government accountability is additionally seen as the anticipations of citizens that the revenue generated from taxes will be used for the advancement of the overall public. Tax revenue has been having hiccups and all boiled down to its level of compliance. Adeniji and Jegede (2019) opined that voluntary tax compliance is a mirage in Nigeria; yet a feat that the government has been seeking to achieve for many years. Most taxpayers believe that the taxes collected are largely misappropriated because the government is perceived, in most quarters to be unscrupulous and insensitive to the requirements of the people. As a result, taxpayers engage in tax minimization schemes (tax avoidance) and/or outright evasion or are reluctant to perform their civic duty of voluntarily paying their taxes as they hold the view that such monies will either be spent recklessly or find yourself in individual pockets.
In spite of this, the government expects that its citizens are going to be fully compliance with the prevailing tax laws, to enable it earn a part of the required revenue to supply and maintain the essential social services for its citizenry but people deliberately do not intend to pay tax for a myriad of reasons, the central of which is that the incontrovertible fact that they have lost trust in the government. Accountability and Transparency of the government by the masses are a serious source of concern hence the masses see non-compliance option as a bail out. The peoples’ willingness is greatly influenced by their perception of the government’s delivery (Akintoye & Tashie, 2013). Consequently, due to non-compliance of the potential tax payers, the role of taxes in enhancing the revenue base of nations of the world will be undermined. This may result in a negative effect on the GDP and hence retardation to economic growth and development. This study therefore seeks to work out the extent of relationship between government accountability, tax compliance and economic growth from Nigerian perspective.