CITN Tax System, Behaviour, Justice, and Voluntary Compliance Culture in Nigeria - Prof Oyedokun UPDATED 1.pptx

CITN Tax System, Behaviour, Justice, and Voluntary Compliance Culture in Nigeria - Prof Oyedokun

Being First Lead Paper Presented at The 5th International Annual Academic Conference on Taxation at the Muhammadu Buhari Main library, Kwara State University, Molete, Kwara State from Monday August 15 to Wednesday 17, 2022

1. Tax System, Behaviour, Justice, and Voluntary Compliance Culture in Nigeria Being First Lead Paper Presented at The 5th International Annual Academic Conference on Taxation at the Muhammadu Buhari Main library, Kwara State University, Molete , Kwara State from Monday August 15 to Wednesday 17, 2022

2. ND (Fin), HND (Acct.), BSc. (Acct. Ed), BSc (Acct. & Fin.), BSc. (Bus. Admin), MBA (Acct. & Fin.), MSc. (Acct.), MSc. (Bus & Econs ), MSc (Tax), MTP (SA), PhD (Acct), PhD (Fin), PhD (FA), FCA, FCTI, ACIB, ACS, ACIS, MNIM, FCNA, FCFIP, FCE, FERP, CICA, CFA, CFE, CIPFA, CPFA, ACAMS, ABR, CertIFR , IPA, IFA, FFAR, FPD-CR, FSEAN

3. Tax System, Behaviour, Justice, and Voluntary Compliance Culture in Nigeria

4. Abstract

5. Introduction

6. Introduction ( Con’t )

7. Problem Statement

8. Objectives of the Study

9. Literature Review

10. Literature Review

11. Literature Review Tax Compliance Compliance with reporting obligations includes filing all required tax returns on time and accurately reporting tax liability in compliance with the Internal Revenue Code, regulations, and court rulings in effect at the time the return is submitted Individuals ' readiness to comply with appropriate tax authorities by paying their taxes is referred to as tax compliance It can be characterised as a multifaceted metric and conceptually by evaluating three various categories of compliance : Payment compliance Filing compliance Reporting compliance The Organisation for Economic Cooperation and Development (OECD) classified compliance as administrative or technical Compliance with administrative norms of lodging and payment is referred to as administrative compliance Also known as reporting compliance or regulatory compliance Technical compliance refers to meeting technical tax law criteria Taxpayers come from a variety of origins, each with their own culture, income, educational background, and tax understanding As a result, Palil and Mustapha (2011) concluded that tax law simplicity is highly associated with tax compliance By simplifying the tax return, taxpayers will consider filing it themselves rather than hiring professionals (Baer & Silvani 1997) Murphy (2009) highlighted that the complexity of the tax system has long been identified as a major factor in tax evasion Tax simplicity influences public opinion on suggested fair tax policy Evidence suggests that the simplification of tax payments is one of the elements leading to voluntary compliance ( Saad , 2014), implying that a complex tax system can be a barrier to voluntary tax compliance Tax rules that are uniform and stable in their enactment and operation reduce the complexity of the tax system and can encourage tax compliance

12. Literature Review

13. Literature Review Taxpayer Behaviour and Compliance The literature identifies two major approaches to the compliance problem. The first is based on economic rationality and was developed through economic research. The second addresses broader behavioural challenges, drawing largely on concepts and data from fields like psychology and sociology (OECD, 2004). Economic and behavioural reasons are sometimes seen as competing. However, each technique can be beneficial in terms of comprehending tax compliance; the question is how the two ways can be used to complement each other (James, Hasseldine , White & Toumi , 2001) 1. Economic Factors Financial burden: There appears to be a link between tax liability and compliance behaviour. For example, if a business owner has a little tax bill that can be readily paid, he or she may be willing to cooperate. However, if the liability is significant, potentially jeopardizing the business's existence, the owner may choose not to pay at all or attempt to change the data supplied to incur a reduced (but erroneous) tax liability. The cost of compliance : Taxpayers tend to encounter various frequent charges associated with having to comply with their tax duties in addition to the actual amount of tax paid. These include the time it takes to complete requirements, the cost of relying on accountants, and the indirect costs associated with tax legislation's complexity. These can include 'psychological' costs such as stress caused by not knowing if they have followed all the tax requirements or even knowing what those rules are. Furthermore, due to their involvement in collecting and paying both indirect and direct taxes, small firms frequently express irritation about being "unpaid tax collectors." Disincentives : Investigations investigating the effects of deterrents, such as financial fines and threats of prosecution(s), indicate that they may have a time-limited influence on taxpayer compliance behaviour. According to studies, individuals who are complying want those who are not compliant to be punished. Incentives: Giving taxpayers incentives may have a positive effect on compliance behaviour (i.e., taxpayers becoming more compliant), but this needs to be investigated further .

14. Literature Review Taxpayer Behaviour and Compliance 2. Behavioural Factors Individual differences: While many taxpayers fulfil their tax obligations, some do not. Gender, age, education level, industry, personality, circumstances, moral compass, and personal risk assessment are all individual elements that influence behaviour. It is generally believed that those that do not comply are more likely to be male, younger, and arrogant, with positive opinions toward tax evasion and bad sentiments toward taxation authorities. There is some evidence that education about the tax system has a direct impact on reducing the proclivity to avoid. Perceived inequity : Taxpayers who believe "the system" is unfair or have personal experience with "unfair" treatment are less likely to cooperate. Perception of minimal risk: If a taxpayer has the option not to comply and believes there is only a minor chance of being caught, he or she will accept the risk. This explains why certain sorts of income are underreported more frequently. Salary and wage income, for example, is frequently very 'visible' to a tax authority due to third-party reporting. Other types of income, on the other hand, may be far less obvious and hence subject to more 'creative' accounting. Risk-taking : Some people see tax evasion as a game to be played and won they want to put their skills to the test by avoiding their obligations and avoiding being caught. Paul Webley, an economic psychologist, previously published a study on business tax compliance. Despite the scarcity of study in this area, he presents an overview of solid empirical findings that apply to both individuals and businesses. Equity: Taxpayers' behaviour is influenced by two perceptions of a taxation system's fairness: that the system treats them unfairly in comparison to others, and that the government does too little with the cash it receives. Opportunity for non-compliance: This according to various research is the most important explanatory factor for non-compliant behaviour. However, it is questionable whether those who are predisposed to noncompliance prefer jobs with more opportunities, such as self-employment rather than Pay-As-You-Earn (PAYE) employment. Social norms: If a person believes that noncompliance is prevalent, they are far less inclined to comply. According to studies, ensuring that taxpayers have an accurate picture of the compliance behaviour of others is useful in lowering non-compliant behaviour. Dissatisfaction with revenue authorities: There is a positive relationship between taxpayers' view that the revenue authority is inefficient or useless and their chance of non-compliance. However, it is unknown how effective this is in comparison to other aspects.

15. Theoretical Framework

16. Review of Previous Empirical Studies

17. Review of Previous Empirical Studies

18. Conceptual Model

19. Methodology

20. Data Presentation and Analysis Source: Field Report, 2022 Table 1 : Demographic Data

21. Data Presentation and Analysis Table 2: Tax Compliance Culture in Nigeria Source: Field Report, 2022

22. Data Presentation and Analysis Table 3: In what ways do tax system affect voluntary compliance culture in Nigeria? Source: Field Report, 2022

23. Data Presentation and Analysis Table 4: To what extent does tax behaviour influence voluntary compliance culture in Nigeria? Source: Field Report, 2022

24. Data Presentation and Analysis Table 5: How can tax justice affect voluntary compliance culture in Nigeria? Source: Field Report, 2022

25. Discussion of Findings

26. Discussion of Findings ( Con’t )

27. Conclusion

28. Recommendations