SELF ASSESSMENT AND VOLUNTARY TAX COMPLIANCE IN EDO STATE, NIGERIA

ABSTRACT

This study examined the impact of the Self-Assessment Regime (SAR) of taxation on voluntary tax compliance in Edo State of Nigeria. The study sought to find out if the introduction of the self-assessment system of taxation influenced voluntary compliance behaviour of corporate taxpayers in the state. Four key components of a SAR- tax audit, taxpayers’ knowledge, enforcement activities, and penalties for non-compliance- were considered in the study. The study used the survey design and the source of data was primary source of data. From a population of 11,341 active companies registered with the Federal Inland Revenue Service (FIRS) offices in Edo State, a sample size of 386 was determined out of which 300 questionnaires returned were valid and used. Both descriptive and inferential statistics were used for data analysis. The study used the Binary Probit Regression method to test the effect of the self-assessment variables on voluntary tax compliance. The results of the analysis showed that all the variables considered played significant role in influencing voluntary compliance behaviour of taxpayers in Edo state. The study therefore recommended that the self-assessment system of taxation in Nigeria should be strengthened further to boost compliance and increase the revenue base of the government. Taxpayer education and enforcement activities should be more aggressively pursued by tax authorities and there should be a review of the existing structure of tax penalties in order to modify it for better partnership between taxpayers and tax authorities.