Economic Determinants Of Tax Compliance AmongAgro-Allied Industries in Katsina State, Nigeria

Abstract

One of the most effective and efficient means of revenue generation that can be used to achieve growth and development by the Nigerian government is tax. However, this can only be achieved through effective tax compliance by the taxpayers like agro-allied industries. Importantly, the agro-allied industries are one of the emerging sub-sectors that can provide government with more tax revenue, which are dominantly present in some local government areas of Katsina state. Therefore, this study empirically investigates the economic factors that determine tax compliance among agro-allied industries in some selected local government areas of Katsina state. In this direction, primary data was collected from 133 agro-allied industries in six (6) local government areas of Katsina state through the use of structured questionnaire and multinomial logit model was adopted for data estimation. The findings basically show that perception on government spending and level of income have significant effects on tax compliance among agro-allied industries; whereas, tax rate indicates insignificant effects on tax compliance. Flowing from the findings, this study recommends that tax rates should be kept moderately low by the government, so as to fiscally motivate taxpayers to comply positively. Similarly, tax authorities should introduce efficient e-tax management platform, in order to control corruption in tax administration, stimulate voluntary tax compliance and provide convenient tax payment procedures, in order to prevent/reduce tax evasion in the country.