Tax Audits and Tax Revenue in Nigeria

Abstract

Low tax compliance and high level of tax evasion in Nigeria have caused more harm to revenue generation in the country. This has limited the capacity of government to raise revenue for developmental purposes. This has raised the curiosity of researcher to examine many tax enforcement strategies as they relate to revenue generation in Nigeria. Therefore, this study investigated the relationship between tax audits and tax revenue in Nigeria with emphasis on the value added tax. The study used the survey and ex post facto research designs to source primary and secondary data from the Federal Inland Revenue Service for analysis. The Pearson’s Product Moment Coefficient of Correlation and Multiple Linear Regression Techniques were employed for analysis. The study showed that tax audits have significant relationship with value added tax. Based on the findings, it was concluded that, tax audit has a significant relationship with tax revenue in Nigeria, and it was recommended that the Federal Government through the relevant tax authorities make policies to strengthen the administration of value added tax. The Federal Inland Revenue Service (FIRS) should go full stretch in the auditing of taxpayers as there should be no sacred cows in tax administration and laws of the Federal Republic of Nigeria as it relates to taxation among others.