Determinants of voluntary tax compliant behaviours in Nigeria

Abstract

This study aims to identify the factors that motivate individual taxpayers' compliance to fiscal obligations in Nigeria. 695 individual and corporate taxpayers in the densely populated and industrial areas of Lagos and Ogun States with high numbers of individual taxpayers were sampled for this study using the cluster sampling technique. Primary data obtained from administered questionnaires were analysed using the ordinary least squares (OLS). Research results show that fear of punishment for tax default, religious beliefs and economic factors have positive relationships with tax compliance; while penalty, financial commitments, level of income, developmental projects/programmes of government and perceived benefits of tax has negative relationships with tax compliance. These results necessitate increased taxpayer education about liabilities of default and developmental benefits of tax payments in religious assemblies and community development associations. Tax rates should float with the level of economic activities to minimise fiscal liabilities in periods of economic downturns and increase compliance.