Determinants Of Income Tax Compliance In A Self-assessment System In Kwara State Nigeria

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Tax collection constitutes a major revenue source for any government to discharge its obligation to its citizens. However, loss of revenue resulting from noncompliance especially in a self-assessment system has been a major problem in Kwara State, Nigeria. This study was designed to examine the determinants of income tax compliance in a self-assessment tax system in Kwara State. The objectives were to: (i) determine the relationship between taxpayers’ knowledge and tax compliance; (ii) examine the effect of tax system structure on tax compliance; (iii) assess the effect of public governance quality on tax compliance; (iv) determine the relationship between public disclosure of taxpayers’ information and tax compliance; and (v) examine the effect of taxpayers’ financial constraint on tax compliance. rnrnSurvey research design was adopted. The population consisted of 68,338 members of the Kwara State Artisans Congress. The respondents were stratified into 54 groups from which a sample size of 558 respondents was randomly selected. The study used primary data collected through a structured questionnaire administered to the respondents. Partial Least Square Structural Equation Modeling (PLS-SEM) technique was employed for model estimation and test of hypotheses. rnrnThe findings of the study were that:rni. tax knowledge has a significant positive relationship with tax compliance (β = 0.107, p<0.01); rnii. there exists a significant negative effect of tax system structure on tax compliance (β = -0.152, p<0.05);rniii. public governance quality has a significant positive effect on tax compliance (β = 0.169, p<0.05);rniv. there exists a significant positive relationship between public disclosure of taxpayers’ information and tax compliance (β = 0.196, p<0.01); andrnv. taxpayers’ financial constraint has a significant negative effect on tax compliance (β = -0.296, p<0.01).rnThe study concluded that tax knowledge, tax system structure, public governance quality, public disclosure of taxpayers’ information and taxpayers’ financial constraint determine tax compliance in a self-assessment system in Kwara State. The study therefore, recommended that Kwara State Government through the Kwara State Internal Revenue Service (KWIRS) should organise tax seminars to enhance taxpayers’ knowledge on tax matters. There is also the need to review the existing tax system structure by increasing the amount of fines and penalties to deter non-compliance; and improve on public governance quality by providing basic amenities and infrastructure. Kwara State Government through the KWIRS should also publicise the detailed information of tax defaulters to serve as deterrence. Finally, the Kwara State government should formulate economic policies that would improve economic activities which consequently would increase the income of taxpayers in the State.

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Determinants Of Income Tax Compliance In A Self-assessment System In Kwara State Nigeria

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