A Causality Analysis between Tax Compliance Behaviour and Nigerian Economic Growth

Abstract

The development of any nation depends on the amount of revenue generated and applied by the government on public infrastructure for the benefits of members of that society. The willingness to pay tax, which may depend on the issues in tax-revenue generation, remains a key taxation-challenge in Nigeria. Therefore, the study, tax compliance behaviour and the causality on Nigerian economy is aimed at evaluating the factors that influence the willingness of citizens to comply with tax and how this tax compliance has affected Nigerian economic growth. A comparative analysis of the willingness to pay tax by citizens in Kogi and Enugu States was presented. Primary data was collected through the administration of questionnaires to self employed in each senatorial district in Kogi and Enugu States. Frequencies and percentages were used to measure the demographic variables of the respondents, and also the factors that affect the willingness to pay tax, while the Chi-square technique was used to measure the difference between willingness to pay tax by citizens in Kogi and Enugu States. It was discovered that many Nigerians are complying with tax payment and that the willingness of citizens to pay tax in Kogi State is significantly higher than that of Enugu State. From the list of factors that were tested for, Trustworthiness of government, Provision of Infrastructural Amenities, Tax Accountability by Government, Level of government delivery, Income, Morale Ethics, Tax Knowledge, Tax Rate, and The System of Tax Payment were found to influence the willingness to pay tax. The conclusion is that compliance through the willingness of citizens to pay tax is very important and cannot be ignored. It is suggested that government should pay attention to the factors that influence the willingness of citizens to pay tax and improve on them, thereby improving peoples? willingness to pay tax, government revenue and economic growth and development of the nation generally.

DOI: 10.5901/mjss.2015.v6n1s1p577