Abstract
The study examined three determinants of voluntary compliance in self-assessment system of tax administration in Akwa Ibom State, Nigeria. This was motivated by the growing need to increase tax revenues generation in developing countries the tax revenue as a ratio of Gross Domestic Product is below the global average and tax administration machinery has been ineffective. Data for the study were collected using a structured questionnaire from respondents registered with the state Board of Internal Revenue determined using Taro Yamene’s Statistical Formula. Descriptive and Regression Analyses were adopted for data treatment. The model summary reveals that 80.8% of the variation in Tax compliance is accounted for the variables of perception of equity and fairness, income level and level of education of the tax payers. The ANOVA Summary justifies that the independent variables have significant influence on tax compliance with f-calculated value of 233.763 being greater than the critical f-value of 0.308451 at P<0.05. The regression coefficient indicates a positive and significant relationship between perception of equity and fairness (0.260), level of education (0.103) and tax compliance. Income level (-0.055) has negative influence on tax compliance. It is recommended that tax authorities should evolve a framework that will motivate, control, sensitize and educate tax payers on voluntary compliance in Self-Assessment system.
Highlights
The study of tax policy is concerned with the design of a tax system that is capable of financing the necessary level of public spending which has been on the increase; in the most efficient and equitable way possible
3.1 Research Design Survey design is adopted for this study involving the use of structured questionnaire to gather data from the sampled population drown from registered Micro, Small and Medium Enterprises (MSMEs) operators with the Akwa Ibom State Internal Revenue Services (SBIRS) as at the end of 2019 fiscal year. 3.2 Population and Sample of the study The population of this study consisted of 3800 MSMEs Operators registered with the state tax authority at the end of 2019 fiscal year
The result revealed that perception of equity and fairness have a significant influence on voluntary compliance in Self-Assessment System in the study area
Summary
The study of tax policy is concerned with the design of a tax system that is capable of financing the necessary level of public spending which has been on the increase; in the most efficient and equitable way possible. In developing economy such as Nigeria that aim at enhancement of economy growth and development as well as becoming integrated with the international economy, tax policy must be a sensitive role. The essence of taxation cannot be achieved without a proper administrative and accounting procedure This procedure will provide an effective tax legislation that enhances collection and stimulates compliance. These benefits include; taxpayers’ precision in calculating their tax liabilities themselves and filing the returns, it saves time as it is done within a stipulated period, it is convenient safe and secure as taxpayers are expected to calculate their tax liabilities at their convenience and the cost of tax collection to the tax authority is low since the burden of calculating the tax liabilities is being shifted to the tax payers
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