EFFECT OF TAX MORALE ON TAX COMPLIANCE IN NIGERIA (A CASE STUDY OF IKORODU LOCAL GOVERNMENT AREA LAGOS)


EFFECT OF TAX MORALE ON TAX COMPLIANCE IN NIGERIA (A CASE STUDY OF IKORODU LOCAL GOVERNMENT AREA LAGOS)     

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF 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 2001defined 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 anissue, 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 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 AIMS AND OBJECTIVES OF STUDY

The major aim of this study is to examine the effect of tax morale on tax compliance in Nigeria. Other specific objectives of the study includes

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 l0ocal government area,Lagos state.

1.4. RESEARCH QUESTIONS

1. What are the effects of tax morale on tax compliance in Nigeria?

2. What are the causes of tax evasion in Nigeria?

3. What is the level of tax compliance in Nigeria?

4. What is the relationship between tax morale and tax compliance in Nigeria?

5. What are the ways of improving tax compliance in Nigeria?

1.5. 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

1.6. 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.

1.7. SCOPE 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

1.8 Limitation of the study

1. Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

2. Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9. 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.

REFERENCE 

Abdulrazaq, M.T. (1993). Principles and practice of Nigerian tax planning and management. Ilorin: Batay Publications Limited. 

Adebisi, J.F. & Gbegi, D.O. (2013). Effect of Tax Avoidance and Tax evasion on Personal Income Tax Administration in Nigeria. American Journal of Humanity and Social Sciences. Vol 1. No.3

Aitken, S. & Bonneville, L. (1980). A general taxpayer opinion survey. Washington D.C: Internal Revenue Service.

 Asika, N. (2000). Research methodology in the behavioral sciences. Lagos: Longman Nigeria Plc.

Attwell, R.L. & Sawyer, A. J. (2001). The ethical attitudes of New Zealand tax practitioners-still „barely passing‟? New Zealand Journal of Taxation Law and Policy, 7(2). 

Australian Taxation Office (1997). Australian Taxation Office annual report 1996-1997,Canberra: Commonwealth of Australia. 

Ayres. F. L. & Braithwaite, J. (1992). Responsive regulation: transcend the deregulation debate, New York, Oxford University Press. 

Beck, P., Davis, J. & Jung, W. (1994). Tax advice and reporting under uncertainty: theory and an experimental evidence. Illinois: University of Illinois.

 Braithwaite, V. & Braithwaite, J. (2000). An evolving compliance model for tax enforcement. In N. Shover and J.P. Wright (Eds.) Crimes of privilege. New York: Oxford University Press.

.

EFFECT OF TAX MORALE ON TAX COMPLIANCE IN NIGERIA (A CASE STUDY OF IKORODU LOCAL GOVERNMENT AREA LAGOS)



TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.NET

Researchwap.net is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.net guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.net is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.net" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.