Determinants of tax compliance behaviour: a proposed model for Nigeria

Determinants of tax compliance behaviour: a proposed model for Nigeria

Despite the various tax reforms undertaken by Nigerian Government to increase tax revenue over the year, prior statistical evidence indicates that the contribution of income tax to the Government’s total revenue remained consistently low and is relatively shrinking. A number of factors may be responsible for this phenomenon but the basic model of tax compliance may not provide adequate explanation to the phenomenon.

In order to gain an in-depth understanding to the factors influencing individual taxpayers’ compliance behaviour in Nigeria, this study proposes an extension to Fischer’s model of tax compliance to incorporate perceived tax service quality, public governance quality, ethnic diversity as well as moderating effect of taxpayer’s financial condition and risk preference. The proposal integrates economic, social, psychological and cultural factors into a single comprehensive model and accounts for the situational and environmental peculiarity of Nigeria for better understanding of individual taxpayers’ compliance behaviour.