DETERMINANTS OF TAX COMPLIANCE IN NIGERIA: AN INSIGHT INTO FEDERAL INLAND REVENUE SERVICE

Abstract

Tax compliance is one of the most important determinants of national economic growth, yet it remains a persistent challenge in Nigeria. While most prior studies have emphasized enforcement mechanisms, such as audits and penalties, this study shows how these factors interactively influence compliance behaviour. Therefore, this study examines the actual determinant of tax compliance in Nigerian public sector. This study identifies the key drivers of tax compliance, namely, socio-economic conditions, complexity of the tax system, social norms, and trust in government. Quantitatively, data from 267 tax experts and officials of the Federal Inland Revenue Service were analysed using SPSS and SmartPLS statistical tools. The findings indicate that socio-economic factors, system complexity, and social influence are the significant drivers of compliance. Individually, however, their effect sizes are relatively weak, showing an interconnected relationship rather than single-variable dominance. According to findings, the deficit of trust in government by the general public mindset influence the tax non-compliance behaviour. The implication of this, therefore, shows that a complete approach to tax reform policy should embody digital innovations and taxpayer education to simplify tax processes in order to improve compliance. Consequently, systemic inefficiency and raising revenue through addressing the problems of voluntary compliance by creating awareness and using technology in tax administration will put Nigeria on a sound footing. These results portend great implications for policymakers, tax authorities, and scholars in various ways by providing long lasting solutions to increase the level of compliance and fiscal governance in developing countries.