Tax Evasion and Avoidance among Small and Medium Scale Enterprises: a Case Study of Funtua LGA
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Abstract
The Nigerian government makes an effort to lessen its over-reliance on crude oil, particularly in light of the volatile price of oil and how it affects revenue profiles. There's little doubt that the Nigerian government can accomplish this goal with efficient tax management. But without positive tax law compliance, it is impossible to raise enough tax revenue. In order to increase revenue production, it is necessary to investigate the factors that influence tax law compliance and non-compliance, particularly among corporate bodies. Therefore, the primary goal of this research is to examine the factors that contribute to small and medium-sized businesses' tax non-compliance (including tax evasion and avoidance), with a focus on Funtua Local Government Area. Accordingly, the study's findings show that, among Small and Medium-Sized Enterprises in the study area, perceptions of government spending and income level have a considerable impact on tax non-compliance, whereas tax rate has a negligible impact. According to the report, the government should maintain relatively low tax rates in this regard to encourage people to comply. Additionally, the government ought to implement sound and effective policy initiatives to increase the financial resources and technological know-how that Micro, Small, and Medium-Sized Enterprises (MSMEs) can draw from. Lastly, in order to raise knowledge among taxpayers, particularly those who operate Micro, Small, and Medium-Sized Businesses, the tax authorities ought to regularly host Town Hall meetings and publicity and awareness workshops.
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