The Ethics of Tax Evasion: Perceptual Evidence from Nigeria
01 Jan 2010-
TL;DR: In this paper, the authors made use of statistical test for population means and level of significance tests to evaluate the hypotheses formulated for the study and found that the level of tax evasion when government is corrupt is significantly higher than when it relates to other views expressed on government discrimination, unjust treatment and tax affordability.
Abstract: Tax evasion has the effect of distorting the principle of perfect market resource allocation with rippling effects on the state of infrastructures. Tax evasion in most developing countries is so rampant and this development is much exacerbate by the fact that not many of these countries have made an effort to measure the ethical reasons that taxpayers give, the extent of this problem and at the same time analyze its impact. Thus, this study is directed towards understanding the behaviour of taxpayers towards tax evasion in Nigeria. The study made use of statistical test for population means and level of significance tests to evaluate the hypotheses formulated for the study. The study shows that the hypothesis that tax evasion is ethical sometimes is not accepted. The study also found that the level of tax evasion when government is corrupt is significantly higher than when it relates to other views expressed on government discrimination, unjust treatment and tax affordability. There are indications from the study that the various arguments that respondents gave to justify tax evasion include government corruption, unfair treatment of citizens, tax affordability and unfavourable tax system. This shows that the responsiveness of government in terms of accountability, human right treatment and optimal tax rate play a significant role in the payment of taxes. The Government and other policymakers should find the results of this study useful in discouraging tax evasion and in developing tax policies aimed at minimizing tax evasion.
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TL;DR: In this article, a study was conducted using SMEs in Zaria, North-Central Nigeria to evaluate and rank the factors that encourage noncompliance with tax obligation by SMEs.
Abstract: Tax is an important stream of revenue for government’s development projects. However, tax compliance among SMEs is poor. Therefore, this study was conducted using SMEs in Zaria, North-Central Nigeria to evaluate and rank the factors that encourage non-compliance with tax obligation by SMEs. It was found that high tax rates and complex filing procedures are the most crucial factors causing non-compliance of SMEs. Other factors like multiple taxation and lack of proper enlightenment affect tax compliance among the SMEs surveyed only to a lesser extent. Therefore, it is recommended that SMEs should be levied lower percentage of taxes to allow enough funds for business development and better chances of survival in a competitive market. The government should also consider increasing tax incentives such as exemptions and tax holidays as these will not only encourage voluntary compliance but also attract investors who are potential viable tax payers in the future.
104 citations
18 Dec 2016
TL;DR: In this paper, the authors investigated how individuals determine their tax morale levels and tax compliance decisions and revealed that tax evasion is morally acceptable in Jordan under some circumstances, indeed there could be an affirmative duty to evade taxes since the government is perceived to be highly corrupted.
Abstract: This paper investigates how individuals determine their tax morale levels and tax compliance decisions. Using a questionnaire survey and a multivariate tests procedure, the paper revealed that tax evasion is morally acceptable in Jordan under some circumstances, indeed there could be an affirmative duty to evade taxes since the government is perceived to be highly corrupted. The findings also show that while the extent of the governmental corruption has a positive (negative) effect on tax non-compliance (tax morale), the efficient expenditure of governmental tax revenues has a negative (positive) impact on tax non-compliance (tax morale). The individuals’ tax non-compliance decisions are likewise positively affected by the tax rates and by the taxation system’s being perceived as unjust, but decline with the increase of audit rates and the subsequent penalty rates. The degree and effectiveness of these determinants are dependent on the individual’s level of risk aversion, financial constraints and the surrounding referent groups. The results also confirm that individual factors play a significant role in determining the level of tax morale. Overall, the tax morale level and the compliance decision of an individual are greatly influenced by gender, age, educational level, occupational status and religious background.
53 citations
TL;DR: A review of the factors that determine taxpayer compliance from a social marketing point of view is presented in this paper. But, the tax literature has not yet developed a theoretical framework to help guide the selection of independent factors, since the use of theory enhances understanding of the major factors that affect a phenomenon.
Abstract: This paper aims at providing a review of the factors that determine taxpayer compliance from a social marketing point of view. Data was obtained from 18 empirical studies published between 1985 and 2012 from across the globe. The findings made several revelations. First, too many and different explanatory factors have been proposed in the literature making comparison of findings across several studies difficult. Second, several researchers proceed without a theoretical framework to help guide the selection of independent factors. Since the use of theory enhances understanding of the major factors that affect a phenomenon, this deficiency has left the tax literature without a meaningful convergence on the key determinants. Third, aggregate analysis showed that attitudinal, normative and subjective control variables were on the overall good predictors of tax compliance. The findings suggest the following implications for research and policy action. First, it is recommended that future studies should seek to develop a few theory based set of relevant determinants of tax compliance that can yield accurate predictions. Second, tax policy makers are advised to desist from exclusive use of the conventional coercive methods (subjective control factors) normally used to compel tax compliance; instead they should take a balanced approach to tax enforcement that will also encourage voluntary compliance through change of attitudes and norms.
43 citations
Journal Article•
TL;DR: In this article, the impact of non-oil tax revenue on economic growth from 1993 to 2012 in Nigeria was analyzed using the Ordinary Least Squares Regression (OLSR) method.
Abstract: This study analyses the impact of Non-oil Tax Revenue on Economic Growth from 1993 to 2012 in Nigeria. To achieve this research objective, relevant secondary data were used from the 2012 Statistical Bulletin of the Central Bank of Nigeria (CBN). These data were analyzed using the Ordinary Least Squares Regression. The result from the test shows that there exists a positive impact of Non-oil Tax Revenue on economic Growth in Nigeria. From the study, it was recommended that efforts should be intensified by the government at all levels towards increased collection of non-oil taxes especially from the informal sector since this increase has the capacity to growth the economy. Also, it was recommended that the administrative machinery of the Federal Inland Revenue Service (FIRS) and other Relevant Tax Authorities be strengthened with a view to eliminating weaknesses and internal control lapses in the assessment and collection of Non-oil Taxes in Nigeria. Tax Audit and Investigation departments are specialized departments and therefore should be manned by professional officers with requisite skills and qualifications. The FIRS and other Relevant Tax Authorities should engage professionals to undertake public enlightenment on the benefits of payment of tax. Government should also be seen to use taxpayers' monies in the provision of infrastructural facilities.
36 citations
TL;DR: In this article, the authors conducted an empirical investigation into the relationship between prosocial behaviour and tax morale in the context of state capacity building as in the Palestinian Territories and found that tax morale increases with public spirit but it is lower among Palestinians involved in associational activities.
Abstract: The first empirical investigation is conducted into the relationship between prosocial behaviour and tax morale in the context of state capacity building as in the Palestinian Territories. We consider ‘public spirit’ (a positive attitude adopted by citizens for the benefit of the community) and associational activity (individuals’ engagement in voluntary activities) two major expressions of prosocial behaviour and estimate their impact on Palestinians’ ‘tax morale’ (intrinsic motivation to pay taxes). The empirical analysis employs a unique Palestinian public opinion survey conducted in 2007 in the West Bank and the Gaza Strip. By using a bivariate probit model, we find that tax morale increases with public spirit but it is lower among Palestinians involved in associational activities. Predicted conditional probabilities indicate that public spirit has more impact when the respondent has low confidence in the institutions and in the rule of law. Finally, more public spirit is required for a self-employed person in order to deal with tax compliance than for a worker in the public sector, unless the worker in the public sector has lower confidence in the institutions and in the rule of law than the self-employed person.
30 citations
References
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Book•
01 Jan 2004
6,435 citations
Book•
01 Aug 1998
TL;DR: In this article, the authors present a survey of case studies, case studies and qualitative data collected from the Internet and from participants' interviews with experts in the field of ethnography and grounded theory.
Abstract: Introduction Part one: Strategies Surveys Case studies Internet research Experiments Action research Ethnography Phenomenology Grounded theory Part two: Methods Questionnaires Interviews Observation Documents Part three: Analysis Quantitative data Qualitative data Writing up the research References Index.
4,213 citations
TL;DR: In this paper, an analysis of the individual taxpayer's decision on whether and to what extent to avoid taxes by deliberate underreporting is presented, based on a simple static model where this decision is the only one with which the individual is concerned, so that we ignore the interrelationships that probably exist with other types of economic choices.
4,106 citations
Book•
01 Jan 2007
TL;DR: The Good Research Guide as mentioned in this paper provides an accessible yet comprehensive introduction to the main approaches to social research and the methods most commonly used by researchers in the social sciences, including data collection methods and data analysis.
Abstract: As a best-selling introductory book on the basics of social research, The Good Research Guide provides an accessible yet comprehensive introduction to the main approaches to social research and the methods most commonly used by researchers in the social sciences.
This edition has been updated to account for recent developments in the field such as : The emergence of mixed methods approaches Increased use of internet research More frequent use of methods such as triangulation and focus groups Developments in research ethics
Written for anyone undertaking a small-scale research project, either as part of an academic course or as part of their professional development, this book provides : A clear, straightforward introduction to data collection methods and data analysis Explanations of the key decisions researchers need to take, with practical advice on how to make appropriate decisions Essential checklists to guide good practice
This book is perfect for the first-time researcher looking for guidance on the issues they should consider and traps they should avoid when embarking on a social research project.
615 citations
TL;DR: In this article, the authors present an EMPIRICAL study of New Zealand's tax evasion, focusing on the role of tax evasion in the economic system, and discuss the following issues:
Abstract: THE ETHICS OF TAX EVASION: AN EMPIRICAL STUDY OF NEW ZEALAND OPINION Robert W. McGee Florida International University Ranjana Gupta Auckland University of Technology
183 citations