IDEAS home Printed from https://ideas.repec.org/p/agd/wpaper/22-008.html
   My bibliography  Save this paper

Fiscal Incentives and Tax Compliance Behaviour in Industrial Clusters: A Survey of Clusters in South-East Nigeria

Author

Listed:
  • Ebele S. Nwokoye

    (Nnamdi Azikiwe University Awka, Nigeria)

  • Clement I. Igbanugo

    (University of Benin, Nigeria)

  • Chukwunonso Ekesiobi

    (Chukwuemeka Odumegwu Ojukwu University, Nigeria)

  • Stephen K. Dimnwobi

    (Nnamdi Azikiwe University Awka, Nigeria)

Abstract

The study investigates the impact of fiscal incentives on the tax compliance behaviour of firms in industrial clusters in Nigeria. Data from 800 firms drawn from three industrial clusters in South-East Nigeria were collected using a structured questionnaire through a multi-stage sampling procedure. Descriptive statistics and the logistic regression model were applied to estimate the survey responses. The major findings of the study show that regular tax audit, firm size, simplifying the communication on tax requirement, communicating deterrent messages, educational attainment of the firm owner and political legitimacy of the current government as well as fiscal incentives (tax credit, tax reduction, capital allowance, investment incentives) significantly influence the tax compliance behaviour of firms in Nigeria’s industrial clusters. Similarly, the study finds that fiscal incentives significantly enhance firm performance in Nigeria’s industrial clusters. Implications and policy suggestions are presented for adoption by concerned stakeholders in the tax and industrial sectors.

Suggested Citation

  • Ebele S. Nwokoye & Clement I. Igbanugo & Chukwunonso Ekesiobi & Stephen K. Dimnwobi, 2022. "Fiscal Incentives and Tax Compliance Behaviour in Industrial Clusters: A Survey of Clusters in South-East Nigeria," Working Papers of the African Governance and Development Institute. 22/008, African Governance and Development Institute..
    • Handle: RePEc:agd:wpaper:22/008
    as

    Download full text from publisher

    File URL: http://www.afridev.org/RePEc/agd/agd-wpaper/Fiscal-Incentives-and-Tax-Compliance-Behaviour-in-Industrial-Clusters.pdf
    File Function: Revised version, 2022
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Aktaş Güzel, Sonnur & Özer, Gökhan & Özcan, Murat, 2019. "The effect of the variables of tax justice perception and trust in government on tax compliance: The case of Turkey," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 78(C), pages 80-86.
    2. E Gahramanov, 2009. "The Theoretical Analysis of Income Tax Evasion Revisited," Economic Issues Journal Articles, Economic Issues, vol. 14(1), pages 35-42, March.
    3. Wenzel, Michael, 2004. "An analysis of norm processes in tax compliance," Journal of Economic Psychology, Elsevier, vol. 25(2), pages 213-228, April.
    4. Bruno S. Frey, 2011. "Punishment – and Beyond," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 5(2), June.
    5. Robert W. McGee & Radoslav Tusan, 2008. "The Ethics of Tax Evasion: A Survey of Slovak Opinion," Springer Books, in: Robert W. McGee (ed.), Taxation and Public Finance in Transition and Developing Economies, chapter 31, pages 575-601, Springer.
    6. Robert W. McGee & Christopher Lingle, 2008. "The Ethics of Tax Evasion: A Survey of Guatemalan Opinion," Springer Books, in: Robert W. McGee (ed.), Taxation and Public Finance in Transition and Developing Economies, chapter 25, pages 481-495, Springer.
    7. Robert W McGee, 2006. "The Ethics Of Tax Evasion: A Survey Of Romanian Business Students And Faculty," The IUP Journal of Public Finance, IUP Publications, vol. 0(2), pages 38-68, May.
    8. Bruno S. Frey, 2009. "Punishment � and beyond," IEW - Working Papers 418, Institute for Empirical Research in Economics - University of Zurich.
    9. Robert W. McGee & Jaan Alver & Lehte Alver, 2008. "The Ethics of Tax Evasion: A Survey of Estonian Opinion," Springer Books, in: Robert W. McGee (ed.), Taxation and Public Finance in Transition and Developing Economies, chapter 24, pages 461-480, Springer.
    10. Robert W. McGee & Marcelo J. Rossi, 2008. "A Survey of Argentina on the Ethics of Tax Evasion," Springer Books, in: Robert W. McGee (ed.), Taxation and Public Finance in Transition and Developing Economies, chapter 14, pages 239-261, Springer.
    11. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    12. Robert W. McGee, 2008. "A Survey of Vietnamese Opinion on the Ethics of Tax Evasion," Springer Books, in: Robert W. McGee (ed.), Taxation and Public Finance in Transition and Developing Economies, chapter 36, pages 663-674, Springer.
    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. Onyekachukwu Ernest Ebenebe & Ifunanya Miracle Ejimgini & Uju Regina Ezenekwe & Christopher U. Kalu, 2024. "Bridging Health Divides: Remittances and Health Expenditure in Nigeria[1]," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(9), pages 24-41, September.
    2. Uju Regina Ezenekwe & Eze A. Eze & Geraldine Ejiaka Nzeribe & Maria Chinecherem Uzonwanne, 2023. "Winning the Environmental Sustainability Crusade: Do Agricultural Development and Public Debt Mitigate Environmental Pollution in Nigeria?," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(9), pages 1481-1497, September.
    3. Hoang, Thon T.C. & Nguyen, Dung T.K., 2023. "Women’s representation in parliament and tax mobilization," MPRA Paper 118367, University Library of Munich, Germany, revised 24 Aug 2023.
    4. Dimnwobi, Stephen Kelechi & Madichie, Chekwube V. & Ekesiobi, Chukwunonso & Asongu, Simplice A., 2022. "Financial development and renewable energy consumption in Nigeria," Renewable Energy, Elsevier, vol. 192(C), pages 668-677.

    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. Colin C. Williams, 2023. "A Modern Guide to the Informal Economy," Books, Edward Elgar Publishing, number 18668.
    2. Lidija Hauptman & Berislav Zmuk & Ivana Pavic, 2024. "Taxpayers' attitudes toward tax compliance in the Slovenian tax system: differences according to gender, income level and size of settlement," Public Sector Economics, Institute of Public Finance, vol. 48(2), pages 177-201.
    3. Ross Adriana M. & McGee Robert W., 2011. "Attitudes toward Tax Evasion: A Demographic Study of Malaysia," Asian Journal of Law and Economics, De Gruyter, vol. 2(3), pages 1-51, October.
    4. Pickhardt, Michael & Prinz, Aloys, 2014. "Behavioral dynamics of tax evasion – A survey," Journal of Economic Psychology, Elsevier, vol. 40(C), pages 1-19.
    5. Robertson Amoah & Samuel Yeboah Asuamah & Newman Amaning, 2014. "An Investigation into Tax Evasion in Ghana," International Journal of Empirical Finance, Research Academy of Social Sciences, vol. 2(3), pages 115-122.
    6. Colin C Williams & Ioana A Horodnic, 2017. "Evaluating the policy approaches for tackling undeclared work in the European Union," Environment and Planning C, , vol. 35(5), pages 916-936, August.
    7. Paul Hewson & Keming Yu, 2008. "Quantile regression for binary performance indicators," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 24(5), pages 401-418, September.
    8. Hasan, Iftekhar & Lozano-Vivas, Ana, 2002. "Organizational Form and Expense Preference: Spanish Experience," Bulletin of Economic Research, Wiley Blackwell, vol. 54(2), pages 135-150, April.
    9. Tom Kompas & Tuong Nhu Che & R. Quentin Grafton, 2004. "Technical efficiency effects of input controls: evidence from Australia's banana prawn fishery," Applied Economics, Taylor & Francis Journals, vol. 36(15), pages 1631-1641.
    10. Richard A. Hofler & John A. List, 2004. "Valuation on the Frontier: Calibrating Actual and Hypothetical Statements of Value," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 213-221.
    11. Lundgren, Tommy & Marklund, Per-Olov & Zhang, Shanshan, 2016. "Industrial energy demand and energy efficiency – Evidence from Sweden," Resource and Energy Economics, Elsevier, vol. 43(C), pages 130-152.
    12. Daniel Solís & Boris E. Bravo‐Ureta & Ricardo E. Quiroga, 2009. "Technical Efficiency among Peasant Farmers Participating in Natural Resource Management Programmes in Central America," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 202-219, February.
    13. Subhash C. Ray, 2004. "A Simple Statistical Test of Violation of the Weak Axiom of Cost Minimization," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 39(1), pages 111-121, January.
    14. Florin Alexandru Roman & Monica Violeta Achim & Robert W. McGee, 2023. "Fraud related to EU funds. The case of Romania," Journal of Financial Studies, Institute of Financial Studies, vol. 14(8), pages 120-142, May.
    15. H Peyton Young, 2014. "The Evolution of Social Norms," Economics Series Working Papers 726, University of Oxford, Department of Economics.
    16. Andriakopoulos, Konstantinos & Ladas, Augoustinos & Andriakopoulos, Panagiotis, 2020. "Bank efficiency and leasing in U.S.A. banking system," MPRA Paper 112645, University Library of Munich, Germany.
    17. Jan Kluge & Sarah Lappöhn & Kerstin Plank, 2023. "Predictors of TFP growth in European countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(1), pages 109-140, February.
    18. Raushan Bokusheva & Lukáš Čechura & Subal C. Kumbhakar, 2023. "Estimating persistent and transient technical efficiency and their determinants in the presence of heterogeneity and endogeneity," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(2), pages 450-472, June.
    19. Giovanni Calice & Levent Kutlu & Ming Zeng, 2021. "Understanding US firm efficiency and its asset pricing implications," Empirical Economics, Springer, vol. 60(2), pages 803-827, February.
    20. Kwan, Simon H., 2006. "The X-efficiency of commercial banks in Hong Kong," Journal of Banking & Finance, Elsevier, vol. 30(4), pages 1127-1147, April.

    More about this item

    Keywords

    Fiscal incentive; Tax compliance; Industrial Cluster; Nigeria;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:agd:wpaper:22/008. 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: Asongu Simplice (email available below). General contact details of provider: https://edirc.repec.org/data/agdiycm.html .

    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.