IDEAS home Printed from https://ideas.repec.org/a/ris/ijafic/0021.html
   My bibliography  Save this article

Informal Sector Taxpayers' Perception Of Influence Of Government Accountability On Voluntary Tax Compliance And The Moderating Role Of Fiscal Exchange

Author

Listed:
  • Olatunde Otusanya, Julius

    (University of Lagos)

  • Gbade Adeyeye, Babatunde

    (University of Lagos)

  • Ovienbor, Lucky

    (Auchi Polytechnic)

Abstract

This study examines informal sector taxpayers' perception ofinfluence ofgovernment accountability on voluntary tax compliance and the moderating role of fiscal exchange in Edo State, Nigeria. The study is motivated by the quality ofpublic accountability, the level oftax compliance by informal sector operators and persistent budget deficit at all levels ofgovernments in Nigeria. Primarydata are utilised for the study. The study adopts cross-sectional survey research design. Nine hundred and nineteen (919) copies ofvalid questionnaire were used for the study; this represents approximately 73% ofthe respondents. The collected data were analysed using both descriptive and inferential statistics. The proposedhypotheses forthe studywere testedusing regression analysis. Results ofthe studyindicate that government accountability has positive significant influence on voluntary tax compliance. The results showed that government accountability alone could account for 16.3% of the variation in voluntarytax compliance.Anotherinteresting revelation ofthe studyis that the results furtherindicated positive substantialincrease in the levelofvoluntarytax compliance from 16.3% to 31.7% as a resultof the interaction of fiscal exchange and government accountability. The study has also provided evidence to show that there is low level of voluntary tax compliance in Edo State informal sector. The study concludes that fiscal exchange is more influential in encouraging taxpayers' willingness to comply with tax laws and regulation. It is, therefore, recommended that Edo State government should be accountable, transparent and strive for excellence in the delivery of quality public goods and services in order to encourage voluntary tax compliance in informal sector.

Suggested Citation

  • Olatunde Otusanya, Julius & Gbade Adeyeye, Babatunde & Ovienbor, Lucky, 2019. "Informal Sector Taxpayers' Perception Of Influence Of Government Accountability On Voluntary Tax Compliance And The Moderating Role Of Fiscal Exchange," International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF), The Institute of Chartered Accountants of Nigeria (ICAN), vol. 8(2), pages 1-20, September.
    • Handle: RePEc:ris:ijafic:0021
    as

    Download full text from publisher

    File URL: http://research.icanig.org/documents/Informal-Sector-Taxpayer-Perception-Article.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lars P. Feld & Jean‐Robert Tyran, 2002. "Tax Evasion and Voting: An Experimental Analysis," Kyklos, Wiley Blackwell, vol. 55(2), pages 197-221, May.
    2. Ross, Michael L., 2004. "Does Taxation Lead to Representation?," British Journal of Political Science, Cambridge University Press, vol. 34(2), pages 229-249, April.
    3. Kastlunger, Barbara & Lozza, Edoardo & Kirchler, Erich & Schabmann, Alfred, 2013. "Powerful authorities and trusting citizens: The Slippery Slope Framework and tax compliance in Italy," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 36-45.
    4. Joshi, Anuradha & Prichard, Wilson & Heady, Christopher, 2014. "Taxing the Informal Economy: The Current State of Knowledge and Agendas for Future Research," Working Papers 13663, Institute of Development Studies, International Centre for Tax and Development.
    5. Prichard,Wilson, 2015. "Taxation, Responsiveness and Accountability in Sub-Saharan Africa," Cambridge Books, Cambridge University Press, number 9781107110861.
    6. Richard M. Bird & Eric M. Zolt, 2005. "Redistribution via Taxation: The Limited Role of the Personal Income Tax in Developing Countries (2005)," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0507, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    7. Torgler, Benno & Demir, Ihsan C. & Macintyre, Alison & Schaffner, Markus, 2008. "Causes and Consequences of Tax Morale: An Empirical Investigation," Economic Analysis and Policy, Elsevier, vol. 38(2), pages 313-339, September.
    8. Anuradha Joshi & Wilson Prichard & Christopher Heady, 2014. "Taxing the Informal Economy: The Current State of Knowledge and Agendas for Future Research," Journal of Development Studies, Taylor & Francis Journals, vol. 50(10), pages 1325-1347, November.
    9. Feld, Lars P & Tyran, Jean-Robert, 2002. "Tax Evasion and Voting: An Experimental Analysis," Kyklos, Wiley Blackwell, vol. 55(2), pages 197-222.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mpofu Favourate Y Sebele, 2021. "Informal Sector Taxation and Enforcement in African Countries: How plausible and achievable are the motives behind? A Critical Literature Review," Open Economics, De Gruyter, vol. 4(1), pages 72-97, January.
    2. Oluwafadekemi S. Areo & Obindah Gershon & Evans Osabuohien, 2020. "Improved Public Services and Tax Compliance of Small and Medium Scale Enterprises in Nigeria: A Generalised Ordered Logistic Regression," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(7), pages 833-860, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Prichard, Wilson, 2016. "Electoral Competitiveness, Tax Bargaining and Political Incentives in Developing Countries: Evidence from Political Budget Cycles Affecting Taxation," Working Papers 13713, Institute of Development Studies, International Centre for Tax and Development.
    2. Yamen, Ahmed & Allam, Amir & Bani-Mustafa, Ahmed & Uyar, Ali, 2018. "Impact of institutional environment quality on tax evasion: A comparative investigation of old versus new EU members," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 32(C), pages 17-29.
    3. Torgler, Benno, 2011. "Tax morale and compliance : review of evidence and case studies for Europe," Policy Research Working Paper Series 5922, The World Bank.
    4. Gwaindepi, Abel, 2019. "Domestic revenue mobilization in Sub-Saharan Africa and Latin America: A comparative analysis since 1980," Lund Papers in Economic History 209, Lund University, Department of Economic History.
    5. Mpofu Favourate Y Sebele, 2021. "Informal Sector Taxation and Enforcement in African Countries: How plausible and achievable are the motives behind? A Critical Literature Review," Open Economics, De Gruyter, vol. 4(1), pages 72-97, January.
    6. Fochmann, Martin & Kroll, Eike B., 2014. "The effects of rewards on tax compliance decisions," arqus Discussion Papers in Quantitative Tax Research 163, arqus - Arbeitskreis Quantitative Steuerlehre.
    7. Pallavi Roy & Mushtaq H. Khan, 2021. "Digitizing Taxation and Premature Formalization in Developing Countries," Development and Change, International Institute of Social Studies, vol. 52(4), pages 855-877, July.
    8. Cyril Chimilila & Vincent Leyaro, 2022. "ICT, e-formalization and tax mobilisation efforts in sub-Saharan Africa," Discussion Papers 2022-03, University of Nottingham, CREDIT.
    9. Fochmann, Martin & Wolf, Nadja, 2015. "Mental accounting in tax evasion decisions: An experiment on underreporting and overdeducting," arqus Discussion Papers in Quantitative Tax Research 186, arqus - Arbeitskreis Quantitative Steuerlehre.
    10. Libman Alexander & Schultz André & Graeber Thomas, 2016. "Tax Return as a Political Statement," Review of Law & Economics, De Gruyter, vol. 12(2), pages 377-445, July.
    11. Gobena, Lemessa Bayissa & Van Dijke, Marius, 2016. "Power, justice, and trust: A moderated mediation analysis of tax compliance among Ethiopian business owners," Journal of Economic Psychology, Elsevier, vol. 52(C), pages 24-37.
    12. James Alm, 2019. "What Motivates Tax Compliance?," Journal of Economic Surveys, Wiley Blackwell, vol. 33(2), pages 353-388, April.
    13. Lovemore George Mwanandi, 2020. "Impact of Auditing on VAT Compliance: A case study of small VAT operators in Blantyre City of Malawi," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(11), pages 326-343, November.
    14. Fochmann, Martin & Kroll, Eike B., 2016. "The effects of rewards on tax compliance decisions," Journal of Economic Psychology, Elsevier, vol. 52(C), pages 38-55.
    15. James, Simon & Edwards, Alison, 2010. "An annotated bibliography of tax compliance and tax compliance costs," MPRA Paper 26106, University Library of Munich, Germany.
    16. Torgler, Benno & Schneider, Friedrich & Schaltegger, Christoph A., 2007. "With or Against the People? The Impact of a Bottom-Up Approach on Tax Morale and the Shadow Economy," Berkeley Olin Program in Law & Economics, Working Paper Series qt6331x6vz, Berkeley Olin Program in Law & Economics.
    17. Désirée Teobaldelli, 2011. "Federalism and the shadow economy," Public Choice, Springer, vol. 146(3), pages 269-289, March.
    18. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    19. repec:thr:techub:10019:y:2021:i:1:p:607-630 is not listed on IDEAS
    20. Mukherjee, Sacchidananda & Rao, R. Kavita, 2017. "Determinants of Registration of Unincorporated Enterprises under State Value Added Tax Act in India," MPRA Paper 81236, University Library of Munich, Germany.
    21. Casal, Sandro & Kogler, Christoph & Mittone, Luigi & Kirchler, Erich, 2016. "Tax compliance depends on voice of taxpayers," Journal of Economic Psychology, Elsevier, vol. 56(C), pages 141-150.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:ijafic:0021. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Daniel Akanbi (email available below). General contact details of provider: http://www.icanig.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.