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Tax Reform, Digitalization, And Tax Compliance Among Small And Medium Enterprises In Nigeria: A Case Study Of Ondo State

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Abstract

Effective tax compliance is crucial for improved economic growth and development. The increasing focus on taxes has led to tax reform and digitalization throughout the Nigerian system. This study, therefore, examined the effect of tax reform proxied by value-added tax reform, online tax payment platforms (OTPP), integrated tax administration systems (ITAS), and digitalization on tax compliance among Small and Medium Enterprises in Ondo State, Nigeria. This study employed the survey research design using primary data. The study population is comprised of seven thousand eight hundred ninety-nine (7899) registered SMEs across the eighteen (18) local government areas in Ondo state as of 2023 (SMEDAN, 2023). Questionnaires were administered to a sample of three hundred and eighty SMEs obtained using the Taro Yamane Formula. The demographic information was analyzed with frequency distribution, and the ordinary least square regression method was used to examine the relationship between the variables and tax compliance using E-view 13. The findings revealed that the variables of value-added tax reform, online tax payment platforms (OTPP), and integrated tax administration systems (ITAS) were statistically significant at 1%. The study, therefore, concluded that value-added tax reform, online tax payment platforms, and integrated tax administration systems positively and significantly affect the tax compliance of SMEs in Ondo State. The study recommends that for improved tax compliance among SMEs in Ondo State, SME Managers should incorporate value-added tax reform into their business strategy since it impacts their businesses and benefits tax compliance. Also, the government should further improve and expand online tax payment services to enhance tax compliance. Similarly, at all levels, the government should invest further in improving and expanding the integrated tax administration system through the relevant tax authorities.

Suggested Citation

  • Olubunmi Veronica , OLOGUN & Sunday Rufus , OLORUNTOBA, 2024. "Tax Reform, Digitalization, And Tax Compliance Among Small And Medium Enterprises In Nigeria: A Case Study Of Ondo State," Journal of Taxation and Economic Development, Chartered Institute of Taxation of Nigeria, vol. 23(1), pages 13-35, March.
    • Handle: RePEc:ris:jotaed:0082
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    More about this item

    Keywords

    Value Added Tax Reform; Digitalization; Online Tax Payment Platform; Integrated Tax Payment System; Tax Compliance;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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