A compliance and audit model for tackling tax evasion in Nigeria

Abstract

Tax evasion remains a significant challenge for Nigeria, undermining economic stability and reducing public revenue. This paper proposes a comprehensive compliance and audit model designed to address tax evasion in Nigeria. The model integrates enhanced compliance strategies, advanced audit procedures, and the strategic use of technology to create a robust framework for tackling tax evasion. The proposed model emphasizes proactive measures to improve taxpayer compliance through targeted education and outreach programs, streamlined reporting processes, and incentivization. On the audit front, it advocates for the adoption of sophisticated audit techniques and technologies, including data analytics and automated systems, to detect and address evasion more effectively. The implementation framework outlines a phased approach involving key stakeholders such as the Federal Inland Revenue Service (FIRS), local tax authorities, and the private sector. By examining domestic and international case studies, the paper highlights successful practices and potential challenges, providing actionable insights for adapting these strategies to the Nigerian context. Evaluation metrics are proposed to assess the model’s effectiveness, with expected outcomes including improved tax revenue, enhanced compliance rates, and strengthened public trust in the tax system. The study concludes with recommendations for further research and policy adjustments to refine and expand the model's application. This approach aims to not only mitigate tax evasion but also contribute to a more transparent and equitable tax system in Nigeria.