THE MODERATING ROLE OF TAX COMPLEXITY ON THE RELATIONSHIP BETWEEN TAX RATE, PENALTY, DETECTION PROBABILITY AND PERSONAL INCOME TAX EVASION IN NIGERIA: A CONCEPTUAL FRAMEWORK

Abstract

Extant Literature revealed a low level of tax compliance due to high increase in tax evasion among individual in Nigeria. Tax evasion issues create extensive debate among policymakers globally. Due to the importance of taxes to the Nigerian economy, this study designs a framework to serve as a policy tool to reduce tax evasion among personal income taxpayers. The framework is based on economic deterrence theory which comprises tax rate, penalty detection probability and personal income tax evasion.
Additionally, tax complexity served as the moderating variable between the exogenous variable and the endogenous construct. If validated, the framework would provide more meaningful insight on the causative agent of tax evasion in Nigeria. Nigerian policymakers would benefit immensely from the study if finally conducted as it would help the government to reduce the level of tax evasion, thereby increasing the government revenue. The proposed framework will be empirically examined via collection and
analysis of the relevant data.