Tax Compliance Intentions and the Behaviour of the Individual Taxpayer: Evidence from Nigeria

Abstract

Tax compliance is a multi-faceted measure and theoretically, it examines payment compliance, filing compliance, and reporting compliance. Taxpayers’ are influenced by the disposition towards public institutions, fairness and social norms in the society. This study investigates the tax compliance intentions and the behaviour of the individual taxpayer in Nigeria. Primary and secondary sources were used for the empirical analysis. The secondary sources were from scholarly books and journals while the primary source involved a well structured questionnaire of four sections of forty seven items with an average reliability of 0.81 that was administered to seven hundred and eighty five respondents. The data collected from the questionnaire were analyzed using relevant diagnostics tests and multiple regression models. The result revealed that a significant relationship between tax compliance intentions and equity attitudes; tax compliance intentions and social and moral norm variables; and tax compliance intentions and risk and penalties. The paper concludes that the behaviour of an average taxpayer should be examined on the basis of financial condition, risk preference, nature of the society in terms of the level of governance. Therefore, the paper made the following useful recommendations that the relevant tax authorities should put in place a permanent department devoted specifically to voluntary tax compliance issues; the relevant tax authorities should apply tax morale model of compliance that incorporates internal taxpayer motivations and emphasizes a more individual carrot and stick approach; the relevant tax authority in Nigeria should improve on the taxpayers’ education and media programmes to encourage voluntary compliance among others.

Keywords: Tax compliance, Behaviour, equity, norms, risk, Nigeria