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Effects of Transfer- Pricing Regulations and Compliance on Tax Administration in Nigeria

Author

Listed:
  • Gideon Tayo Akinleye

    (Ekiti State University)

  • Clement Olatunji Olaoye

    (Ekiti State University)

  • Bamikole Samson Fajuyagbe

    (Ekiti State University)

Abstract

This paper examines the effects of transfer- pricing regulation and compliance on tax administration in Nigeria. The paper uses a descriptive survey research design. Questionnaire was used as the research instrument for data collection. Analyses were made with ordered logit regression, Pearson product moment correlation, variance inflation factor (VIF) and white heteroskedasticity test. Ordered logit regression reveals that transfer- pricing regulation had a tendency to significantly influence tax administration with z-values of 2.8931 (p=0.00381) while transfer- pricing compliance had an insignificant effect of 0.016 with z-values of 0.1335 (p=0.89379) on tax administration in Nigeria at likelihood ratio test of Chi-square (2)= 25.7916 [0.0000]. This study implies that transferpricing and its compliance has the capacity to improve the effectiveness and efficiency of tax administration in Nigeria. Hence, we concluded that there is poor administration of transfer- pricing tax policy in Nigeria. It is, therefore, recommended that Federal Inland Revenue Service should put in place not only transfer- pricing laws but adequate machinery in terms of human and technological capital coupled with sensitization on the applicability of the existing transfer- pricing tax policy in Nigeria.

Suggested Citation

  • Gideon Tayo Akinleye & Clement Olatunji Olaoye & Bamikole Samson Fajuyagbe, 2018. "Effects of Transfer- Pricing Regulations and Compliance on Tax Administration in Nigeria," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(5), pages 86-97, OCTOBER.
    • Handle: RePEc:dug:actaec:y:2018:i:5:p:86-97
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    References listed on IDEAS

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    2. Mr. Vito Tanzi, 2000. "Globalization, Technological Developments, and the Work of Fiscal Termites," IMF Working Papers 2000/181, International Monetary Fund.
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