PITA 2011 and Voluntary Tax Compliance: Towards Achieving Sustainable Revenue Generation in Kaduna State Nigeria
Journal of Finance and Accounting
Volume 6, Issue 6, November 2018, Pages: 150-161
Received: Nov. 1, 2018;
Accepted: Dec. 3, 2018;
Published: Jan. 2, 2019
Views 254 Downloads 77
Nyor Terzungwe, Department of Accounting and Management, Nigerian Defence Academy, Kaduna, Nigeria
Jonathan Agnes Jummai, Department of Accounting and Management, Nigerian Defence Academy, Kaduna, Nigeria
Mustapha Lateef Olumide, Department of Accounting and Management, Nigerian Defence Academy, Kaduna, Nigeria
Sustainable governance entails using the compulsory contribution paid to government by her citizens to support law and order, provide security and social amenities for the benefit of present and future generations. Nigeria's Personal Income Tax Act (PITA) 2011 was amended to provide for sustainable tax policies and administration that would secure voluntary tax compliance and guarantee sustainable revenue generation. The amendment introduced a more equitable tax system by providing realistic tax rates, and recommending an efficient and effective tax administrative system, and simpler tax laws. This study examines the determinants of voluntary tax compliance in Kaduna state Nigeria taking self-assessment, income tax rates, and penalties as provided by PITA 2011, with a view to ascertain whether the Act has significantly affected voluntary tax compliance in the State. The population of study is 4925 registered self-employed individuals who are subjected to Direct Assessment system in Kaduna State, Nigeria. A sample 370 respondents was arrived at using the Yaro Yamani formula. Descriptive statistics and multiple regression technique were used to analyze the data. The study reveals that the amended provisions of PITA 2011 on Self-assessment, Income tax rates and Penalty are capable of enhancing voluntary tax compliance but poor knowledge of the tax laws, unstable economy and administrative bottlenecks have affected the potency of the Act. The study therefore recommends among others that the Kaduna state Government employ measures to boost compliance, such as educating tax payers by summarizing the provisions of PITA 2011 in some widely spoken languages and communicating same.
Jonathan Agnes Jummai,
Mustapha Lateef Olumide,
PITA 2011 and Voluntary Tax Compliance: Towards Achieving Sustainable Revenue Generation in Kaduna State Nigeria, Journal of Finance and Accounting.
Vol. 6, No. 6,
2018, pp. 150-161.
National tax policy, (2012). Federal ministry of finance. Retrieved from www.firs.gov.ng
Akhideme, E. A., & Abusowan, E. R., (2013). Personal Income Tax (Amendment) Act 2011; Implication for tax enforcement, AFRREV IJAH An International Journal of Arts and Humanities Bahir Dar, Ethiopia Vol. 2 (4), S/No 8, September, 2013: 217-232 ISSN: 2225-8590 (Print) ISSN 2227-5452 (Online).
Okonjo-Iwella, N., (2012). A comprehensive tax history of Nigeria. Published by Safari book ltd, Ibadan Nigeria. © Federal Inland Revenue Service (FIRS)
Mustapha, L.O., (2015). Determinants of personal income tax compliance in Kaduna State, Nigeria. Dissertation submitted to the department of accounting, faculty of social science, Nigeria defence Academy Kaduna, Nigeria.
Dabo, Z., Aimuyedo, M. & Muhammad, T., (2014). The Effect of Personal Income Tax Amendment Act on Revenue Generation in Nigeria. Retrieved from: http://ssrn.com/abstract=2488098
Khabel, B. D., and Nwokah, N.G., (2009). Curbing Tax evasion and avoidance in personal income tax administration: A study of the south –south State of Nigeria in European Journal of Economic, Finance and administration Sciences, 15;51-61.
Andreoni, J., Erard, B., & Feinstein, J., (1998). Tax compliance. Journal of. Econ. Literature., 36: 818-60.
Fagbemi, T.O., Uadiale, O.M., & Noah, A.O., (2010). The ethics of tax evasion: Perceptual evidence from Nigeria, European Journal of Social Sciences, 17(3): 360-371.
Roth, J., Scholz,j., & Witte, D,. (1989), Tax payer compliance volume 1,an agenda for Research. University of Pennyslevian Press, Anniversary Collection.
Appah, E., & Ogbonna, G. E., (2014). Self-Assessment Scheme and Revenue Generation in Nigeria. Developing Country Studies ISSN 2224-607X (Paper) ISSN 2225-0565 Vol.4, No.10, (Online) www.iiste.org
Simon, J., & Clinton, A., (2004). Tax compliance, Self- assessment and Tax Administration. Journal of finance and management in public service, vol 2 no 2.
James, A., Betty, R. J., & Michael, M., (1992). Estimating the determinants of tax payer compliance with experimental data. National Tax Journal. Vol. 45 No 1, March 1992. PP 107-14
Abdulsalam, M., Almustapha, A. A., & Elmaude, J. G., (2014). Tax rate and tax compliance in Africa. European Journal of Accounting, Auditing and Finance research vol 2, No 3 PP 22-30. May 2014, retrieved from www.eajornals.org
Kennedy, O. P., & Omoye, S.A., (2014). An appraisal of Personal Income Taxation in Nigeria. Asian economic and financial review, 2014, 4(1), 33-41. Retrieved from http://aesswb.com/journal-detail.php
Fjeldstad, O. H., & Semboja, J., (2001). Why people pay taxes: The case of the development levy in Tanzania, World Development, 29(1), 2059-2074.
Edward, E.M., Christian, M. & Alex, I., (2014). Determinants of Tax Compliance: A Review of Factors and Conceptualizations. International Journal of Economics and Finance; Vol. 7, No. 9; 2015 ISSN 1916-971XE-ISSN 1916-9728retrieved from URL:http://dx.doi.org/10.5539/ijef.v7n9p207
McKerchar, M.A. and Evans, C., (2009). Sustaining Growth in Developing Economies through Improved Taxpayer Compliance: Challenges for Policy Makers and Revenue Authorities. UNSW Law Research Paper, No. 2009-17. SSRN eLibrary. Available at: http://ssrn.com/abstract=1415164
Okello, A., (2014). Managing income tax compliance through self-assessment. IMF working paper, WP/14/41. email@example.com
Alabede, J., Zaimah, B. T., & Kamil, M. D., (2011). Does taxpayers financial conditions moderate determinant of tax compliance behaviour. British Journal of Economic, Finance and Management Sciences, vol1 (2) 2011 September.
Boylan, S., & Sprinkle, G., (2001). Experimental Evidence on the Relation between Tax Rates and Compliance: The Effect of Earned vs. Endowed Income. Journal of the American Taxation Association, 23(1), 75-90.
Moser, D.V., Evans III, J.H., & Kim, C.K., (1995). The effects of horizontal and exchange inequity on tax reporting decisions. The Accounting Review, 70(4), 619-634.
Alm, J., Jackson, B., & McKee, M., (1992). Institutional uncertainty and taxpayer compliance. The American Economic Review, 82, 1018-1026.
Alan, H.P., (1996). The determinant of individual income tax compliance. Estimating the Impacts of Tax Policy, Enforcement, and IRS responsiveness. Pub 1916 (Rev 11-96). Washington Dc 1996
Jackson, B.R., & Milliron, V.C., (1986). Tax compliance research, findings, problems and prospects. Journal of Accounting Literature, 5, 125-155.
Palil, M., & Mustapha, A., (2011). Determinants of Tax Compliance in Asia: A case of Malaysia. European Journal of Social Sciences, 24(1), 7-32.
Bojuwon, M. (2010).The impact of tax fairness and demorgraphic factors on tax compliance in Nigeria, An MSc Thesis in Accounting, University of Utara, Malaysia.
Fakile, S.A., (2011). Analysis of tax morale and tax compliance in Nigeria, Unpublished PHD thesis presented to Department of accounting, covenant university, Ota, Nigeria
Hair, J., Black, W. C., Babin, B. J., & Anderson, R. E., (2010). Multivariate Data Analysis (7th ed.). Upper Saddle River, New Jersey: Pearson Education International.