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Tax Audit, Penalty And Tax Compliance In Nigeria


  • Iyere Oghuma, Richard

    (Ambrose Alli University)


This study examined the influence oftax audit and penalty on tax compliance paradigm ofcompanies' income taxpayers in Nigeria. Discourse on tax in terms of audit, penalty and compliance is germane because governments at all levels depend on revenue generated through taxation to drive their programmes. Cross-sectional survey design was adopted for the study. The population for the study comprised allregistered corporate taxpayers in Nigeria.A totalofone hundred andfifty (150) corporate taxpayers whose tax files are domiciled in Edo State were selected for this study. The selection ofthe sample size was based on stratified random sampling method. Copies of questionnaire were distributed to the selected companies. The questionnaire was adapted from the work ofPalil (2010). To evaluate the strength of the measures used, Ordinary Least Square (OLS) regression was used for modelestimation through Econometric Views (E Views) software. Findings revealed that tax audit and tax penalty have positive and significant relationships with tax compliance. It is recommended that effective tax compliance canbe achieved byincreasing the frequencyoftax auditandby strengthening tax penalty to serve as deterrent mechanism against non-compliance. The paper concluded that corporate taxpayers should perceive their income tax payments as contribution to creating conducive business environment.

Suggested Citation

  • Iyere Oghuma, Richard, 2018. "Tax Audit, Penalty And Tax Compliance In Nigeria," International Journal of Accounting and Finance (IJAF), The Institute of Chartered Accountants of Nigeria (ICAN), vol. 7(2), pages 74-86, December.
  • Handle: RePEc:ris:ijafic:0005

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    References listed on IDEAS

    1. Keith Walsh, 2012. "Understanding Taxpayer Behaviour – New Opportunities for Tax Administration," The Economic and Social Review, Economic and Social Studies, vol. 43(3), pages 451-475.
    2. Alm, James & Blackwell, Calvin & McKee, Michael, 2004. "Audit Selection and Firm Compliance With a Broad-Based Sales Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 57(2), pages 209-227, June.
    3. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
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