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Informal Sector Taxpayers' Perception Of Influence Of Government Accountability On Voluntary Tax Compliance And The Moderating Role Of Fiscal Exchange

Author

Listed:
  • Olatunde Otusanya, Julius

    (University of Lagos)

  • Gbade Adeyeye, Babatunde

    (University of Lagos)

  • Ovienbor, Lucky

    (Auchi Polytechnic)

Abstract

This study examines informal sector taxpayers' perception ofinfluence ofgovernment accountability on voluntary tax compliance and the moderating role of fiscal exchange in Edo State, Nigeria. The study is motivated by the quality ofpublic accountability, the level oftax compliance by informal sector operators and persistent budget deficit at all levels ofgovernments in Nigeria. Primarydata are utilised for the study. The study adopts cross-sectional survey research design. Nine hundred and nineteen (919) copies ofvalid questionnaire were used for the study; this represents approximately 73% ofthe respondents. The collected data were analysed using both descriptive and inferential statistics. The proposedhypotheses forthe studywere testedusing regression analysis. Results ofthe studyindicate that government accountability has positive significant influence on voluntary tax compliance. The results showed that government accountability alone could account for 16.3% of the variation in voluntarytax compliance.Anotherinteresting revelation ofthe studyis that the results furtherindicated positive substantialincrease in the levelofvoluntarytax compliance from 16.3% to 31.7% as a resultof the interaction of fiscal exchange and government accountability. The study has also provided evidence to show that there is low level of voluntary tax compliance in Edo State informal sector. The study concludes that fiscal exchange is more influential in encouraging taxpayers' willingness to comply with tax laws and regulation. It is, therefore, recommended that Edo State government should be accountable, transparent and strive for excellence in the delivery of quality public goods and services in order to encourage voluntary tax compliance in informal sector.

Suggested Citation

  • Olatunde Otusanya, Julius & Gbade Adeyeye, Babatunde & Ovienbor, Lucky, 2019. "Informal Sector Taxpayers' Perception Of Influence Of Government Accountability On Voluntary Tax Compliance And The Moderating Role Of Fiscal Exchange," International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF), The Institute of Chartered Accountants of Nigeria (ICAN), vol. 8(2), pages 1-20, September.
    • Handle: RePEc:ris:ijafic:0021
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    References listed on IDEAS

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    Cited by:

    1. Oluwafadekemi S. Areo & Obindah Gershon & Evans Osabuohien, 2020. "Improved Public Services and Tax Compliance of Small and Medium Scale Enterprises in Nigeria: A Generalised Ordered Logistic Regression," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(7), pages 833-860, July.
    2. Mpofu Favourate Y Sebele, 2021. "Informal Sector Taxation and Enforcement in African Countries: How plausible and achievable are the motives behind? A Critical Literature Review," Open Economics, De Gruyter, vol. 4(1), pages 72-97, January.

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