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Federal Inland Revenue Service Tax Awareness Index: Development and Validation

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  • Fred Femi Akinfala
  • Martha Ekong
  • Abubakar Liman
  • Pirfa Tyem
  • Adashu Ashu
  • Mohammed Kam-Selem

Abstract

Taxation is not just a means for generating revenue for the country, it is also a tool used to regulate the economy using fiscal policy, to control inflation, prices of goods and services and bridge the gap between the rich and the poor. However, the awareness for this all-important component of any goal-oriented government is poor. It is against this backdrop that this study aimed at developing a Tax Awareness Index for use in the Nigerian context. The study adopted descriptive survey approach with a cross-sectional design. The sampling approach to recruit participants for the study was the convenience sampling method. Data analysis involved the use of principal component analysis (PCA) with Varimax rotation. Results showed that the initially proposed 10-factor solution of 94 questionnaire items was not supported with the data gathered. However, a 5-factor solution emerged that made substantive sense for the purpose of developing a Tax. Awareness Index. A composite score on the 5-factor solution indicates the level of tax awareness for a respondent. It was concluded that this index would serve as a viable tool to measure how much the general populace is aware of tax and its components.

Suggested Citation

  • Fred Femi Akinfala & Martha Ekong & Abubakar Liman & Pirfa Tyem & Adashu Ashu & Mohammed Kam-Selem, 2018. "Federal Inland Revenue Service Tax Awareness Index: Development and Validation," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(7), pages 249-249, June.
    • Handle: RePEc:ibn:ijbmjn:v:13:y:2018:i:7:p:249
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    References listed on IDEAS

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    1. Clotfelter, Charles T, 1983. "Tax Evasion and Tax Rates: An Analysis of Individual Returns," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 363-373, August.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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