Journal • CITN Journal

Editorial Board

Editor-in-Chief

Professor Rafiu Oyesola Salawu

Department of Management & Accounting, Faculty of Administration, Obafemi Awolowo University, Ile-Ife

Managing Editor

Professor Godwin Emmanuel Oyedokun

Department of Management & Accounting, Lead City University, Ibadan, Nigeria

Editorial Board Secretary

Mary-Fidelis Chidoziem Abiahu

Director, Research and Professional Standard, Chartered Institute of Taxation of Nigeria

Editorial Board Members

Professor Chinedum Nathaniel Nwezeaku

Federal University of Technology, Owerri

Professor John Adeoti

Nigeria Institute of Social and Economic Research (NISER), Ibadan

Professor Uche Jack-Osimiri

Faculty of Law, River State University, Port Harcourt

Professor Aruwa Suleiman Akwu-Odo Salihu

Nasarawa State University, Keffi Nasarawa State Nigeria

Dr. Eiya Ofiafoh Ofiafoh (Associate Professor)

Department of Accounting, University of Benin, Benin City, Nigeria

Dr. Stephen Chukwuemeka Mark Abani

MCSA Worldwide Projects Limited, Abuja, Nigeria

Dr. Kenny Adedapo Soyemi

Department of Accounting, Olabisi Onabanjo University, Ago Iwoye, Ogun State, Nigeria

Professor Joseph Uchenna Uwaleke

Department of Banking & Finance, Nasarawa State University, Keffi Nasarawa State, Nigeria

Barrister Chukwuemeka Eze

Faculty of Law, Nasarawa State University, Keffi Nasarawa State, Nigeria

Mr. Simon Nwanmaghyi Kato

Federal Inland Revenue Service, Chairman’s Office, Abuja, Nigeria

EFFECT OF TAX AUDIT ON TAX COMPLIANCE IN KWARA STATE, NIGERIA

Description

EFFECT OF TAX AUDIT ON TAX COMPLIANCE IN KWARA STATE, NIGERIA

Authors

OLANIYI, Taiwo Azeez and ILESANMI, Omolabake Olufemi

Abstract

The frequency of tax audits and investigations in recent times by the Federal Inland Revenue Service (FIRS) and the various State Boards of Internal Revenue (SBIR) in Nigeria emanates from non-compliance attitude of taxpayers which eventually led to revenue leakages. Conversely, the ever increasing demand of the populace (infrastructure facilities) calls for effective tax drive to increase revenue base. This study therefore examines the effect of tax audit on tax compliance in Kwara state with a view to establish the difference between tax revenue in the pre and post audit periods. Secondary data in respect of tax audit, tax compliance, government revenue, government spending and penalties for 229 companies in Kwara State from 2003 to 2016 were extracted from Tax Audit Department of Kwara State Internal Revenue Service and Kwara state Audited accounts. These data were analysed using Classical Ordinary Least Square (OLS) regression method. The finding of the study reveals as follows: a significant positive relationship (p=0.0076) exist between tax audit and tax compliance in Kwara State between 2010 and 2016; a positive linear relationship (p=0.0033) between government spending and tax compliance in the State. Penalty/fine for default in tax payment has positive effect on tax compliance (p=0.0076) while tax revenue is also higher during the tax audit period (2010-2016) than the pre-tax audit period (2003- 2009). Based on these findings, the study concludes that tax audit has a significant positive impact on tax compliance. The study therefore recommends that tax audit should be carried out on a routine basis to ensure that actual revenue collected is what the relevant tax authority remits to the government, internal mechanism to check and monitor the staff of the tax audit department should be put in place to ensure accountability of tax revenue.

Keywords: