EFFECT OF TAX MORALE ON TAX COMPLIANCE IN NIGERIA

CHAPTER ONE  

INTRODUCTION 

1.1        Background of the study

1.2        Statement of problem

1.3        Objective of the study

1.4        Research Hypotheses

1.5        Significance of the study

1.6        Scope and limitation of the study

1.7       Definition of terms

1.8       Organization of the study

CHAPETR TWO

2.0   LITERATURE REVIEW

CHAPETR THREE

3.0        Research methodology

3.1    sources of data collection

3.3        Population of the study

3.4        Sampling and sampling distribution

3.5        Validation of research instrument

3.6        Method of data analysis

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS AND INTERPRETATION

4.1 Introductions

4.2 Data analysis

CHAPTER FIVE

5.1 Introduction

5.2 Summary

5.3 Conclusion

5.4 Recommendation

Appendix

 

 Abstract

This study is on effect of tax morale on tax compliance. The total population for the study is 200 staff of Ikorodu local government of Lagos state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up directors, counselors, senior staff and junior staff was used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies

 

 

 

 

 

 

 

 

 CHAPTER ONE

INTRODUCTION

• Background of the study

The concept of Quid Pro Quo applies to every facet of life-taxation inclusive. An average tax payer expects something of value in return from the government for taxes paid (Adebisi and Gbegi, 2013). When this value is not returned to the taxpayers, tax morale may drop gradually, leading to tax evasion. In Nigeria today, tax is regarded as one of the major sources of government funds. Taxation is one of the most discuss issue in government in both developed and developing countries. James and Noble 1992 in their research defined tax as a compulsory levy by a public authority for which nothing is received directly in return. Nightingale in the year 2001 defined tax as compulsory contribution, imposed by government, and while taxpayers may receive nothing identifiable in return for their contribution, they nevertheless have the benefit of living in a relatively educated, healthy and safe society. She went on to on to explain more about taxation as part of the price to be paid for an organized society and identified six reasons for taxation; below are some of the six reasons for taxation:

1. Provision of public goods
2. Redistribution of income and wealth
3. Promotion of social and economic welfare
4. Economic stability and harmonization and
5. Regulation.

In other words tax can also be defined as a particular amount levied on the citizens by the government against the income, profits, property, wealth and consumption of individuals and corporate organizations to enable government obtain the required revenue to provide basic amenities, security and well-being of the citizens. The term taxation has long being known since the time of the Egyptians under the rulership of Pharaoh according to (Webber and Wildavsky, 1986). Pharaoh did great by placing his tax collectors on high salaries so as to remove their eyes from fraud. In Nigeria today the issue of corruption is a major clog of the efficiency of tax collection in most part of the country especially in the Ikorodu part of Lagos State in Nigeria. The issue of tax according to Allingham and Sandmo (1972), in his research stated that corruption of the tax agency is still an issue, especially in developing countries according to the traditional model of tax compliance. The level of corruption in the administration of tax tends to be on the increase; imagine a situation where a taxpayer will manipulate his or her own figure with claim on a poor income on their tax return by solving an expected utility-maximization problem that trade off the tax savings from a poor reporting of true income against the risk of audit and penalties for detected noncompliance.

 1.2 STATEMENT OF THE PROBLEM

The standard of living in Nigeria is on the decline and the unwillingness of taxpayers to comply with the payment of tax today tends to become an issue. The average human being abhors the payment of tax. He sees taxation as a discredited imposition and evidently obnoxious. This stems mainly from the absence of a “quid pro quo” i.e. something of value given in return (by the government) for taxes paid. Taxes, it is commonly argued, should not be paid as the authority does not provide amenities which are in any way commensurate with the taxes paid. There is no guaranteed compensation benefit (Adebisi and Gbegi, 2013). The federal government of Nigeria has put in so much effort to administer tax in the development of the Nigeria economy but most of the effort seems abortive as the level of corruption is on the increase. Take Ikorodu local government area of Lagos for instance; most of the inhabitants of this area are petty trader and peasant farmers; compliance to payment of tax tend to become a problem; their reason being that they operate on a small scale and yet the level of tax levied on them is much. There moral for compliance to the payment of tax tends to be on the decrease.

 1.3 OBJECTIVE OF THE STUDY

The major objective of this study is to examine the effect of tax morale on tax compliance in Nigeria. Other specific objectives of the study include
1. To examine the causes of tax evasion in Nigeria

2. To examine the level of tax compliance in Ikorodu local government area.
   3. To determine the relationship between tax morale and tax compliance in Ikorodu local government area, Lagos state.
   4. To recommend ways improving tax morale in Ikorodu local government area, Lagos state.

 

 

1.4 RESEARCH HYPOTHESES

H0: tax morale does not affect tax compliance in Nigeria

H1: tax morale affects tax compliance in Nigeria

H0: there is no significant relationship between tax morale and tax compliance in Nigeria

H1: there is a significant relationship between tax morale and tax compliance in Nigeria

1.5 SIGNIFICANCE OF THE STUDY

This study would be of immense important to government at all level especially the government of Lagos state in formulating efficient tax policies that would improve tax compliance. This study would also benefit students, researchers and scholars who are interested in tax morale and compliance.

1.6 SCOPE AND LIMITATION OF THE STUDY

This study is restricted to the effect of tax morale on tax compliance in Nigeria with a case study of Ikorodu local government area of Lagos state. The researcher encounters some constrain which limited the scope of the study;

1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
3. c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities

1.7 DEFINITION OF TERMS

TAX MORALE: Tax in accordance to the study is simply the willingness to pay tax

EVASION: Tax evasion in accordance to the study may be define as the deliberate negative attitude of tax payer towards payment of tax
CORRUPTION: This is simply the fraudulent attitudes of taxpayer in the payment of tax

COMPLIANCE: compliance according to the study is simply the willingness of a taxpayer to pay tax with ease without complain.

1.8 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study

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