EFFECTS OF VERTICAL FAIRNESS, TRUST IN AUTHORITY ON VOLUNTARY TAX COMPLIANCE IN JIGAWA STATE NIGERIA

Abstract

Abstract
Tax compliance is declining in Nigeria over time. Many factors might contribute to the tax
non-compliance level in Nigeria. Many studies indicate that complexities, inequality, lack
of conveniences and inefcient tax system are the major causes of tax non-compliance in
Nigeria. The desire for tax compliance through fairness perception is increasingly rapidly
in both developed and developing countries, which make it necessary for policymakers to
explore several means to encourage voluntary tax compliance. Fairness which believed to
be a multidimensional construct in tax system is, eventually needed fundamentally if not
urgently to encourage voluntary tax compliance across different level of taxpayers.
Effective tax administration is a primary determinant of efcient revenue generation,
implementation of tax policy and a conducive environment for investment. The aim of this
study is to examine the effects of vertical fairness and trust in authority on voluntary tax
compliance among owners' managers of micro enterprise in Jigawa State Nigeria. The
study employed survey inform of questionnaires and used SPSS and PLS to analyze the
data. The results revealed that vertical fairness has a positive and signicance relationship
with voluntary tax compliance, and trust in authority has a positive and signicance
relationship with voluntary tax compliance. The nding has a signicance implication to
the relevant tax authorities, because the result offers more insights for the tax authorities
and government at large to strengthen the tax administration holistically, and make it
friendlier and fairer to encourage more voluntary tax compliance which in turn will
enhance signicantly the overall government revenue. The study, therefore, recommend
that, the Jigawa State government should increase the fairness of the tax system, in such a
way that those with high income can pay higher tax rates and vice versa, which will
eventually enhance government revenue in turn.