Impact of Tax Compliance on Standard of Living in Nigeria

This study examined the impact of tax compliance on economic development in Nigeria. The motivation for this study was primarily premised on the paucity of theoretical literature on tax compliance and economic development in Nigeria. The specific objective examined if tax compliance impact human capital development and per capital income in Nigeria. In trying to achieve this objective, A quantitative research design has been adopted having been found to be appropriate for the quantitative research model that underpins the study at hand through regression was adopted for the data analysis. The results of the study indicate that the tax compliance have positive impact on economic development in a time series data of Nigeria’s Economy during 2003 – 2019. The linearity test revealed that linear relationship exists between tax compliance and standard of living in Nigeria. The research closes the knowledge gap induced by inconclusive evidence on the growth effects of human capital development and per capita income which most often have resulted in situations where results of researches done in developed economies are generalized to developing countries. This study recommends that government should adhere strictly on compulsory tax compliance due to its effect on economic development prospect and its less distortionary nature, and also utilize the positive relationship between tax compliance and human capital development to realize efficient government investment that spurs economic growth.