Taxpayers Knowledge and Compliance: Evidence from Direct Assessment Tax in Lagos State

Abstract

The research work examines the nexus between Tax Knowledge and Tax Compliance among Taxpayers: Evidence from Direct Assessment in Lagos State. This study adopts the survey research design to elicit responses from selected taxpayers in the Ikeja Lagos State of Nigeria to explore what they perceived as the relationship between tax knowledge and tax compliance regarding tax payment and tax filing of returns. Primary data was collected through a designed questionnaire and was administered using the Kaiser-Meyer-Olkin test. Cronbach Alpha was also used in establishing the sampling adequacy and reliability of the research instrument. The survey results were collected from 200 respondents in three categories in Lagos State with 190 valid responses, including self-employed, taxpayers in public and private establishments in Ikeja from October to November 2020. The study adopted a judgmental sampling technique. The data extracted from the questionnaires were analyzed using a simple table as descriptive and Pearson Correlation at 1% Level of Significance as inferential statistics. The findings revealed that the general tax knowledge was significantly related to tax compliance in payment terms (r = .993, p =0.000) and tax compliance in terms of filing of returns (r = .986, p =0.000). thus, the study concluded that there is a positive relationship between tax knowledge and tax compliance.

Moderation of tax socialization of factors affecting taxpayer compliance in the time of Covid-19

“…Taxpayers who have high knowledge will comply with applicable tax regulations. This statement supported (Ishola et al, 2020) that good knowledge will create a positive attitude towards taxes, poor knowledge would encourage a negative attitude towards taxes. The results of this study are following the results of studies conducted by (Susanti et al, 2020), (Hartopo et al, 2020), (Bernard et al, 2018), which show that tax knowledge has a positive effect on taxpayer compliance.…”

E-Tax Registration and Tax Payers’ Compliance in Lagos State, Nigeria

“…According to Ishola et al [23], knowledge of the implementation of e-tax registration is defined as a situation in which taxpayers are informed about the Integrated Tax Administration System (ITAS), an electronic platform that allows registered taxpayers in Nigeria for filling Value Added Tax (VAT) and personal income tax electronically. How much of taxpayers' knowledge and skill about electronic tax services that allow them to perform various tax activities such as registration, filing, payment, and compliance certificate issuance online using the ITAS application launched by the FIRS in 2013 is referred to as taxpayers' knowledge of e-tax registration [6].…”

“…The extent to which taxpayers assess the online service delivery of the State Internal Revenue Services and the Federal Inland Revenue Service (FIRS), as satisfying their expectations and need for e-tax registration purpose is known as the perceived quality of the e-tax system [23].…”

Compliance Burden and Tax Gap Among Micro and Small Businesses: Evidence From Ghana

“…However, the individual may be audited and if the underreported income is discovered, a penalty is paid on each amount. Thus, the economic deterrence model views taxpayers as utility maximizers who are motivated by varying economic motives and choose to evade tax whenever the expected gain of evasion exceeds the cost (Atawodi & Ojeka, 2012; Ishola et al, 2020; Mangoting et al, 2020). High cost of compliance (high gain from evasion) will increase evasion and therefore create tax gaps.…”