Public Governance Quality and Tax Compliance Behavior in Nigeria: The Moderating Role of Financial Condition and Risk Preference

James O. Alabede, Zaimah Bt. Zainol Ariffin, Kamil Md Idris


To have better understanding of compliance behavior of individual taxpayers in developingcountries especially Nigeria, this study is undertaken primarily to test relationship between taxpayers’perception about public governance quality and their compliance behavior as well as todetermine whether the relationship is moderated by financial condition and risk preference individuallyand jointly. This study involved a survey of individual taxpayers’ opinion, perceptionand behavior about public governance quality as well as tax compliance. The major finding ofthis study is that public governance quality has significant positive relationship with tax compliancebehavior. The study also indicates that risk preference has strong negative moderatingeffect on the relationship between public governance quality and tax compliance behavior. Administrationof income tax in Nigeria is characterized by low compliance level and therefore,there is no doubt that improvement in public governance quality would contribute significantlyin reawakening the culture of tax compliance among individual taxpayers in Nigeria. Empirically,nothing much is known in tax compliance literature about the influence of public governancequality on tax compliance behavior of individual taxpayers as well as the moderating effectof financial condition and risk preference on tax compliance and its determinants. Thisstudy extended tax compliance model to incorporate public governance quality and moderatingeffects of financial condition and risk preference. Copyright ©

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Issues In Social and Environmental Accounting (ISEA) - ISSN: 1978-0591