ABERRANCE AND COMPLIANCE OF TAX PAYMENT: A STUDY OF SMEs IN ABA, ABIA STATE

In Nigeria, taxation is the critical source of revenue which has been used to provide public services to the citizens. However taxation among the informal sectors like SMEs is still a pressing issue. The objective of this study is to examine the effect of tax aberrance compliance of tax payment by SMEs in Aba, Abia State-Nigeria. Specifically, the study examined the effect of educational level on tax compliance, tax simplicity on tax compliance of SMEs in Aba, Abia State, threat of penalty on tax compliance of SMEs in Aba, Abia State among others. Literature in related areas were extensively reviewed. The population of the study covers 228 SMEs that are registered under the Abia State Board of Internal Revenue, while a sample size of sixty five (65) was used as a representation of the study. However, four hypotheses were postulated and tested using the logit and probit regression model .The findings revealed that educational level has a positive and significant relationship with tax compliance, tax simplicity has a positive and significant relationship with tax compliance, threat of penalty has a positive and significant relationship with tax compliance and tax service quality has a positive and significant relationship with tax compliance and thereby influences tax compliance. The study recommends among others that, tax authority should strive to give tax payers high quality services in order to enhance tax compliance, make the tax laws less complex to reduce cost of compliance and enhance tax compliance this could be done by distributing easy-to-read information fliers, increase penalty and ensure that offenders are punished to serve as lesson to future offenders.