FACTORS INFLUENCING TAX COMPLIANCE AMONG SMALL AND MEDIUM ENTERPRISES (SMES) IN LAGOS STATE, NIGERIA

This study explores the factors influencing tax compliance among Small and Medium Enterprises (SMEs) in Lagos State, Nigeria. Using a survey research design, data was collected from 286 SME owners and financial managers across three local government areas: Ikeja, Surulere, and Lagos Island. The study specifically aimed to assess the effects of financial literacy, perceived fairness of the tax system, and the ease of filing taxes on compliance behavior. The results showed that a majority of respondents (65%) were moderately knowledgeable about tax regulations, with higher financial literacy correlating to higher compliance rates. Perceived fairness was also a significant factor, as 58% of respondents indicated that a transparent and equitable tax system influenced their willingness to comply. Furthermore, the ease of filing taxes emerged as a critical determinant, with 70% of SMEs stating that simpler tax filing procedures would enhance their compliance. The findings underscore the need for targeted financial literacy programs, improved transparency in the tax system, and simplified tax filing procedures to foster greater tax compliance among SMEs in Lagos State