Effect of Tax Audit on Compliance of Taxpayers: A case study of Katsina State Board of Inland Revenue

Abstract

This paper focus on the effect of tax audit on the compliance of taxpayers in the Katsina State Board of Internal Revenue. This paper adopted the survey research design, using primary data. The questionnaire was structured thematically, in line with the research hypotheses, so that the respondents can concentrate on each theme and provide focused answers. The target population of the study comprised of the entire staff of the Katsina State Board of Internal Revenue in Katsina State which aggregated to a sum of Seventy-five (75) staff. The total staffs of the board were considered for the study consisting of Seventy-five staff. Tax Remittances (TAR) is the dependent variable. Independent Variable Audit Yield (ADY) and Field Tax Audit (FDTA) are considered as having potential effect on Tax Audit. Questions were measured on a 5-point “Likert” scale ranging from strongly disagreed (1) to strongly agreed (5) and a mean was obtained to compare against the expected mean. The result on Tax Compliance proxy by Tax Remittances is found to be positively associated with Audit Yield and Field Tax Audit with a coefficient of 0.342 and statistically significant at 5% with a P-value of 0.007. This goes to prove that Audit Yield field and Tax Audit have a statistically influence on Tax Compliance in Katsina State which implies that the null hypotheses of the study are rejected.