CHAPTER ONE
INTRODUCTION
1.1 Background to the study
The importance of taxation in the activities of any government cannot be overemphasized. This is due to the fact that tax plays a pivotal role in generating revenue for the government, however, not every national government have been able to effectively exploit this great opportunity of revenue generation (Anyaduba et al 2012:37). The level of tax compliance in Nigeria has been a popular topic of discourse and it has been said that several efforts of government to increase the compliance of citizens towards tax payment have proved abortive. According to Ubesi and Edeh (2016:60), tax is a compulsory contribution imposed by government against the income, profits, wealth, property, and consumption of individuals and corporate organizations to enable government obtain the required revenue to provide basic amenities, security, and well-being of the citizens. Tax morale is a very important and integral attitude that impacts on tax compliance. According to (Torgler 2002) cited in (Ubesi and Edeh 2016:61), tax morale is defined as the intrinsic motivation to pay taxes. They stress its relevance to understand the high observed level of compliance.High tax morale is required from the taxpayer in order to achieve a high degree of tax compliance. taxation is one of the most volatile subjects in governance both in the developing and developed countries. It has been established that there is a positive relationship between tax morale and tax compliance in Nigeria, that is, the higher the intrinsic motivation to pay tax, the higher the tax compliance. However, it has been discovered that a lot of factors tend to influence tax morale and tax compliance in Nigeria among which is the government performance. Some researchers have in fact defined tax as a compulsory contribution imposed by government and while tax payers may receive nothing identifiable in return for their contribution.
1.2 Statement of the problem
Over the years, tax compliance has been a major issue Nigerian government has faced. This is due to the fact that some citizens don’t pay tax while the ones that pay either don’t pay the complete amount or they don’t pay on time. Low tax compliance is a matter of serious concern in many developing countries especially Nigeria given the fact that it limits the capacity of the government to raise revenue for developmental purposes (Ubesi and Edeh 2016:60). This has made this topic well documented, however, much emphasis haven’t been on analysing tax morale in Nigeria. Hence, the study intends to fill the gap in the literature by making a comprehensive analysis of tax morale and tax college in Nigeria. This will explain the tax morale of Nigerian citizens and their level of compliance to payment of tax.
1.3 Objectives of the study
The main objective of this study is to analyse tax morale and tax compliance in Nigeria. In order to achieve this, the study aims to achieve the following specific objectives:
1.) To determine the extent to which tax morale have effect on tax compliance.
2.) To understand the factors that affect tax morale in Nigeria
3.) To examine the effect of the Nigerian tax system on tax morale of taxpayers.
4.) To ascertain the effect of trust in government on tax compliance