Effect of Tax Reforms on the Tax Compliance Level of Companies in Nigeria

Okeke, Clement Ejiofor and Salaudeen, Yinka Mashood (2023): Effect of Tax Reforms on the Tax Compliance Level of Companies in Nigeria.

Abstract

The Nigerian company income tax has undergone historic reforms since early 1990 for the main purpose of encouraging voluntary tax compliance by the companies. This study therefore examined the impact of the past corporate tax reforms on the tax compliance level of companies in Nigeria. Secondary data in the form of annual corporate tax revenue and GDP were extracted from the National Bureau of Statistics records, Federal Inland Revenue Service reports, and Central Bank of Nigeria Bulletins from 1991-2021. Tax compliance rate was generated by computing annual corporate tax revenue as a percentage of the GDP. Wilcoxon rank-sum test and ANOVA were used to determine impact of the reforms on tax compliance. The findings show that only reforms of 2007 and 2015 had significant impacts on tax compliance level out of eight reforms reviewed. While the reform of 2007 had a positive impact, that of 2015 was negative.

• Item Type: MPRA Paper
• Language: English
• Keywords: Tax; Tax Compliance; Tax Reforms; Corporate Tax Compliance Behaviour; GDP; Companies; Company Income Tax Revenue
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M4 - Accounting and Auditing > M48 - Government Policy and Regulation

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