Indicators of Tax Evasion Behaviour Among Entrepreneurs: Evidence From Nigeria

Abstract

This study identified the indicators of tax evasion among entrepreneurs in Osun State. This was with a view to improving understanding on the indicators of tax evasion and providing information that are beneficial to tax officials saddled with the responsibility of ensuring that taxpayers are not negligent in paying their taxes. The population for the study consisted of officials of the Osun State Internal Revenue Service and taxpayers who are entrepreneurs in OsunState. The study surveyed a
sample size of 50 tax officials out of 316 from the Osun State Internal Revenue Service and 600 taxpayers who are entrepreneurs in the 30 local government area of Osun State using purposive sampling technique. Selection was based on the availability of taxpayers’ record of the Osun State Internal Revenue Service within the period of this study. Data on the indicators of tax evasion were sourced through the administration of structured questionnaire. Data collected were analysed using descriptive statistics. The result showed that the indicators of tax evasion in Osun State included maintaining more than a single set of transaction records (82.0%), low level of
patriotism (84.0%), use of false names to register businesses (84.0%), large unexplained gaps in documentation (78.0%), underreporting of income (96.0%), non-filling of tax returns form (96.0%) and non-registration of businesses (96.0%). It was concluded from the study that the prospect of improved government tax revenue is a function of effective management of these indicators by government and tax authority.