Tax Administration and Thin Capitalization of Listed Manufacturing Companies in Nigeria (Published)
The paper seeks to evaluate the effect of Tax administration on Thin Capitalization of listed manufacturing companies in Nigeria. The study utilized Autonomy in Operation (AIO), Transparency in Assessment and Income Collection (TAI), Accountability in Revenue Remittance (ARR), Motivation for Effectiveness and Efficiency (MEE) Professional Competence (PFC) as constructs for Tax Administration on Thin Capitalization of Listed manufacturing companies in Nigeria. A survey research design was adopted for the study. The study population comprises 475 staff members of the Federal Inland Revenue Service (FIRS) Offices in Lagos where the listed manufacturing companies file their annual tax returns and 15 major tax consultants who prepare and file these tax returns for the companies. The sample size of 220 staff members in these organizations was calculated using Taro Yamane’s formula and randomly selected. Data were collected through the administration of copies of questionnaires. The reliability of the data was tested using the Cronbach Alpha Coefficient Technique. Descriptive and inferential (multiple regression) statistics were used to analyze the data at 5% level of significance. Descriptive and inferential (multiple regression) statistics were used to analyze the data at a 5% level of significance. The findings revealed that there is a significant effect of Tax administration on Thin Capitalization (TCP) of listed manufacturing companies in Nigeria. This is evidenced by the result of the test, TCP (Adj.R2 = 0.184, F (5, 21) = 9.232, p > 0.05). These findings should be of major interest to policymakers to review the Thin Capitalization rules and provisions in the Nigeria tax laws to evaluate its effectiveness or otherwise in curtailing thin capitalization practices of listed manufacturing companies in Nigeria. This study provides original empirical evidence on the effect of Tax administration on Thin Capitalization on listed manufacturing companies in Nigeria.
Keywords: tax administration, tax aggressiveness, thin capitalization practices, thin capitalization rules
Strategy to close tax gaps created by tax avoidance and tax evasion in Nigeria: an overview (Published)
The increase in the tax avoidance and tax evasion among the taxpayers has become a subject of discourse among the tax authorities and other stakeholders across the globe. Tax evasion and tax avoidance, a problem which seems to have defied solution, had been deviled the tax system right from colonial times. While some had blamed the situation on tax authorities for not living up to expectation with regards to tax administration, others attribute it to the unpatriotic attitude of taxpayer. In view of the above, this paper examines the strategy to close tax gaps created by tax avoidance and tax evasion. Contents analysis research design was adopted by reviewing the available literature in the field of this study. It was discovered that Voluntary Asset and Income Declaration Scheme, effective communication of tax benefits to the taxpayers enhance voluntary compliance with payment of tax by taxpayer. Equitable distribution of amenities without using sentiment ,religion, tribe among other things will also increase tax revenue while ,transparency and accountability, consistent updates to the taxpayer’s registry, equitable distribution of income and use electronic channels for simple transactions were also identified as part of strategies to close the gap created by tax avoidance and tax evasion.
Citation: Olufemi F. Oladejo (2021) Strategy to close tax gaps created by tax avoidance and tax evasion in Nigeria: an overview, European Journal of Accounting, Auditing and Finance Research, Vol.9, No. 7, pp.55-63
Keywords: Nigeria voluntary compliance, Tax Evasion, Taxpayer, Voluntary Asset and Income Declaration Scheme, equitable distribution of income, tax administration, tax avoidance, tax revenue taxpayers’ registry