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

THE EFFECT OF TAX POLICY ON COMPLIANCE AMONG SMALL AND MEDIUMSCALE ENTERPRISES IN SOUTHWESTERN, NIGERIA

Description

THE EFFECT OF TAX POLICY ON COMPLIANCE AMONG SMALL AND MEDIUMSCALE ENTERPRISES IN SOUTHWESTERN, NIGERIA

Authors

Abiodun O. Oladejo, James Unam Monday and Olubode Olusegun Oladele

Abstract

Major objective of Nigeria National tax policy is to ensure a robust tax system that will promote voluntary compliance with tax policy by taxpayers and enhance constant revenue generation by governments at all levels. However, the objective has not been achieved in Nigeria due to the alarming level of SMEs’ non-compliance with tax policy. This study specifically determined the level of awareness of tax policy among SMEs in Southwestern Nigeria; examined the extent of compliance with tax policy among SMEs; and analysed challenges encountered by the SMEs on compliance with tax policy. The study employed primary data. The population of the study comprised 730 registered SMEs in Southwestern Nigeria. Using Yamane’s formula, a sample of 452 SMEs was selected. Structured questionnaires were used to obtain data on voluntary compliance and taxpayers’ awareness. Data collected were analysed using percentage, mean, least square method and Chi-square test of independence. The results showed that the operators of SMEs in the Southwestern Nigeria have low level of awareness of tax policy (????̅ = 2.88). The study also revealed low level of compliance with tax policy among SMEs (????̅ = 2.87). Furthermore, the results revealed that awareness of tax registration (t = 6.755, p < 0.05), awareness of taxpayers' right and obligation (t = 7.861, p < 0.05), and awareness of correct tax liabilities to be paid (t = 4.782, p < 0.05) had significant effect on the compliance of SMEs with tax policy. Finally, the study showed that high level of corruption in the tax administration (81.8%), attitude of members ofstaff of revenue authorities (77.8%), lack of financial capacity to pay tax liability when loss is made (73.2%), and cumbersome compliance process (65.3%) were the most prevalent challenges faced by SMEs on compliance with tax policy. The study concluded that awareness of tax policy has the propensity to drive compliance among SMEs in the country.

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