Sustainable Voluntary Tax Compliance Systems and Economic Development in Nigeria: A Survey-Based Regression Analysis
Abstract
The study investigates the effect of sustainable voluntary tax compliance systems on economic development in Nigeria by examining three institutional and behavioural determinants: taxpayer education and awareness, tax administration efficiency, and trust in government and tax transparency. Despite repeated administrative reforms, persistently low levels of voluntary compliance, a narrow domestic revenue base, and weak fiscal capacity continue to constrain Nigeria's development financing. The study used a cross-sectional survey design. Taxpayers and tax administration stakeholders from all thirty-six states and the Federal Capital Territory were sampled using multi-stage purposive sampling, with 506 valid questionnaires returned (91.2 %). The internal consistency of the research instrument was excellent, with Cronbach's alpha of 0.912. The researchers conducted descriptive and multiple regression analyses to analyse the data. The results indicate that all three predictors positively and significantly affect economic development, with tax administration efficiency being the most significant predictor (β = 0.301, p < 0.001), followed by trust in government and tax transparency (β = 0.231, p < 0.001) and taxpayer education and awareness (β = 0.196, p < 0.001). The model accounted for around 70.9% of the variance in economic development (R² = 0.709; F = 346.212, p < 0.001), and a second model showed that sustainable voluntary tax compliance significantly predicted economic development outcomes. The study finds that voluntary compliance systems based on trust are more sustainable for domestic revenue mobilisation than enforcement, and suggests increased taxpayer education, further digitalisation of tax administration and increased transparency in the use of tax revenues.
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