Are Tax Penalties Effective Enough in Combating Tax Evasion?

This paper examined whether Tax Penalties is Effective in Combating Tax Evasion in Nigeria. The study adopted descriptive research design and data were obtained using structured questionnaire. The Ordinary Least Square Regression (OLS) and Pearson Correlation model were used to test the hypothesis. The study is hinged on two (2) theories which include deterrence theory and ability to pay theory. To accomplish the objectives of the study, a total of 52 questionnaire were administered to the selected tax officers (20) and taxpayers (32). Five-point Likert scale questionnaire and simple random techniques were used to select respondents for the study. Collected data were analyzed using descriptive and inferential statistics such as frequency and percentage. Findings show that the four-hypothesis tested were significant, Tax knowledge and Awareness effect on Tax Evasion (p = 0.0095 < 0.05); Tax Administration effect on Tax Evasion (p = 0.007 < 0.05); Auditing Capacity influence on Tax Evasion (p = 0.001 < 0.05); and Corruption of Tax Offices on Tax Evasion (r = .003, p < 0.05). These indicate that Tax knowledge and Awareness, Tax Administration, Auditing Capacity, and Corruption of Tax Offices are capable of influencing the level of tax evasion. It was revealed that tax knowledge and awareness, tax administration, and auditing capacity have significant effect in reducing tax evasion level but limited by high level of corruption in public offices. The study thus recommends among others that tax laws should be further codified, harmonized and enforcement machinery should be strengthened. The level of punishment should also be stricter and legal provisions for doing this should be clearly stated.

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Publication Details

Journal
Zenodo (CERN European Organization for Nuclear Research)
Published
2025-07-04
DOI
https://doi.org/10.5281/zenodo.15803979
Primary Topic
Taxation and Compliance Studies
Type
article
Field-Weighted Citation Impact
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article

Are Tax Penalties Effective Enough in Combating Tax Evasion?

Zenodo (CERN European Organization for Nuclear Research)
Taxation and Compliance Studies
article

Are Tax Penalties Effective Enough in Combating Tax Evasion?

article en

Abstract

This paper examined whether Tax Penalties is Effective in Combating Tax Evasion in Nigeria. The study adopted descriptive research design and data were obtained using structured questionnaire. The Ordinary Least Square Regression (OLS) and Pearson Correlation model were used to test the hypothesis. The study is hinged on two (2) theories which include deterrence theory and ability to pay theory. To accomplish the objectives of the study, a total of 52 questionnaire were administered to the selected tax officers (20) and taxpayers (32). Five-point Likert scale questionnaire and simple random techniques were used to select respondents for the study. Collected data were analyzed using descriptive and inferential statistics such as frequency and percentage. Findings show that the four-hypothesis tested were significant, Tax knowledge and Awareness effect on Tax Evasion (p = 0.0095 < 0.05); Tax Administration effect on Tax Evasion (p = 0.007 < 0.05); Auditing Capacity influence on Tax Evasion (p = 0.001 < 0.05); and Corruption of Tax Offices on Tax Evasion (r = .003, p < 0.05). These indicate that Tax knowledge and Awareness, Tax Administration, Auditing Capacity, and Corruption of Tax Offices are capable of influencing the level of tax evasion. It was revealed that tax knowledge and awareness, tax administration, and auditing capacity have significant effect in reducing tax evasion level but limited by high level of corruption in public offices. The study thus recommends among others that tax laws should be further codified, harmonized and enforcement machinery should be strengthened. The level of punishment should also be stricter and legal provisions for doing this should be clearly stated.

Zenodo (CERN European Organization for Nuclear Research)
Her Majesty's Revenue and Customs (GB), Lead City University (NG)
Peace, Justice and strong institutions
Openalex Percentile: Top 48%
Taxation and Compliance Studies
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