AN ASSESSMENT OF THE IMPACT OF CORPORATE TAX INCENTIVES ON TAX COMPLIANCE IN NIGERIA
Tax incentives allowed businesses by tax laws in Nigeria are expected to encourage business to thrive as well as enable them to continue operation to perpetuity rather than promoting tax evasion; these incentives have been misunderstood thereby breeding complexities in Nigeria tax system. This study therefore evaluates the impact of tax incentive on tax compliance in Nigeria; Survey design method was adopted; using structured questionnaire administered on fifty selected small and medium Enterprises in Nigeria. The data collected was analyzed using regression analysis. Three hypotheses formulated were tested using p-value and Pearson Movement Correlation. The result showed the existence of a positive relationship between tax incentive scheme and willingness to pay tax with coefficient (0.297). The adjusted R² of (0.688) indicating that tax incentive causes a 68.8% variation in government tax revenue in Nigeria; the F-statistics of (14.077) is greater than the F-cal at (0.020) level of significance which shows a statistical significance (p<0.05). The result obtained also indicates that tax incentive have significant effect on tax compliance and overall tax revenue of government. Also, that the economic factors; (labour cost, interest rate and government policy) affect level of tax compliance among companies. Implied from the above is that; in order to ensure a high rate of tax compliance among Nigerian firms, economic factors should be adequately considered. It’s recommended that government should pay attention to identified factors that influence citizens’ tax compliance and improve on them. This will in turn expand readers’ knowledge about the significance of those tax compliance factors towards improving government revenue; economic growth and development.
|Keywords: Tax Compliance, Tax Incentives, Tax Revenue and Economic Factors, Corporate Tax.|
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