Empirical investigation of the nexus between tax audit and taxpayers’ compliance in South West, Nigeria

Abstract

This study investigated the nexus between tax audit and taxpayers’ compliance in South West, Nigeria. The study adopted a descriptive survey design with the aid of a structured questionnaire to elicit the needed information from the respondents. The population, which equally represented the sample size was all the 93 Audit and Administrative staff of the headquarters of the State Board of Internal Revenue Service (SBIR) of Ekiti, Osun and Oyo States. Descriptive and inferential statistics were used to analyse data. The hypothesis was tested with Pearson Correlation and multiple linear regression. The result indicated that tax audit has a positive and significant effect on both the voluntary and non-voluntary taxpayer’s compliance in Southwest, Nigeria with their respective coefficient and significant values of 0.672 and 0.000<0.05 for voluntary tax compliance and 0.586 and 0.000<0.05 for non-voluntary tax compliance. The study, therefore, recommended that the state governments should intensify more efforts on tax audits through the employment of more competent staff and periodic training to enhance its significant effect on tax compliance level in the country.