Effect of Tax Audit and Tax Amnesty on Tax Yield in Southwest, Nigeria

Niyi Awotomilusi,Samuel Ajibade Dada,Omobola Odunola Adebayo

doi:10.18535/ijsrm/v9i12.em1

Niyi Awotomilusi, Samuel Ajibade Dada + Show 1 more

Open Access

https://doi.org/10.18535/ijsrm/v9i12.em1

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Abstract

The study aimed at investigating the effect of tax audit and tax amnesty on tax yield in southwest Nigeria. Tax audit and tax amnesty are part of the tax administration programmes which serves as government’s instrument for determining and monitoring tax collection. Residents have a natural urge to reduce their tax obligations by intentionally overstating their expenses and producing fraudulent entries and falsehoods in their accounting records. Without a doubt, this shows a lot about Nigeria’s tax administration. The study was carried out in southwest Nigeria which comprises of Ekiti, Ondo, Osun, Oyo, Ogun and Lagos States. Survey research method was used for the study and 302 staff of the audit and risk departments from the State Board of Internal Revenue (SBIR) and Federal Inland Revenue Service (FIRS) formed the population of the study. Taro Yamane sampling technique was adopted to get the sampling size of 172 respondents. The researcher created a closed-ended questionnaire called Tax Administration and Tax Yield (TATY) to gather relevant data for the study. The study found that tax audit has significantly positive link with tax yield while tax amnesty has a negative and substantial correlational influence on tax yield significant relationship with tax yield. It was recommended that tax audits should be undertaken on a regular basis and tax amnesty should be fairly play down because it may reduce future tax revenue.

Highlights

World over, it is the responsibility of the government to harness all the available resources and judiciously use them for the benefit of the citizens
The findings of this study show that tax amnesty has no impact on tax compliance in Jakarta, that e-billing has a favorable impact on tax compliance, and that e-filling has a good impact on tax compliance
Mean greater than 3.00 “Agreed” otherwise “Disagreed” Source: Author’s Computation 2021 The effect of tax audit on tax yield presented in the table 1 revealed that (90.3%) of the respondent indicated that there is possibility of been exposed by tax audit and this compels accurate reporting, (94%) revealed that tax payers file adequate tax returns because of fear of tax audit, (100%) of the respondents agreed that regular tax audit influence tax compliance, and 100% of the respondent showed that tax authorities have standardized program that aid successful tax audit

Summary

Introduction

It is the responsibility of the government to harness all the available resources and judiciously use them for the benefit of the citizens. Revenue generation is central to every government of any country in that it determines its functionality. In Nigeria, one of the prominent means with which the government generates money is through tax yield. Adeogun (2012) asserted that tax revenue is an input extorted by the government from individuals and organizations either directly or indirectly. Taxes are to be paid and efficiently utilized It must be paid by every individual, partner and corporation for the use of the development of the country by the government. The taxes collected are used for the common goods of every citizen within the country, state, or local government for the provision of certain services, which are considered as necessities for the wellbeing of the citizens such as the provision of clean water, electricity, good road, bridges, etc

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