Odunayo Olamide Olaniyi

Developing countries are characterized by a low level of tax compliance arising from weaknesses in tax administration and trust deficits. This poses a critical challenge toward the attainment of developmental goals. This paper aims to examine the moderating role of trust in tax authorities for the relationship between tax administration and personal income tax compliance in Nigeria. The study used a survey design to obtain data through a structured questionnaire administered to randomly selected individual taxpayers from Nigeria; 365 responses were collected. The OLS results revealed that tax administration significantly influences personal income tax compliance (β = 0.301, t = 4.068, and p-value = 0.000). Trust in tax authorities significantly influences personal income tax compliance (β = 0.183, t-value = 3.650, and p-value = 0.000). Furthermore, the result showed that trust in tax authorities positively moderates the relationship between tax administration and personal income tax compliance (β = 0.323, t = 4.098, and p-value = 0.000). This study concludes that tax administration significantly affects personal income tax compliance, and trust in tax authorities moderates this relationship in Nigeria.

Type of the article: Research Article

Abstract
Mistrust in the social contract between governments and citizens in emerging markets remains a significant topic of scholarly research. Hence, the study examined the influence of governance quality on informal sector tax compliance behavior in Osun State, Nigeria. Primary data were obtained through a structured questionnaire spread among 256 respondents from a total population of 710 small and medium-scale enterprises (SMEs), comprising trading associations, petty traders, and market traders, in three major commercial cities from each of the three senatorial districts in the State: Osogbo, Ilesa, and Ede. The data were analyzed using partial least squares structural equation modelling (PLS-SEM). The results revealed that governance quality, measured by factors such as control of corruption (β = 0.36; p = 0.00), regulatory effectiveness (β = 0.663; p = 0.00), and voice and accountability (β = 0.078; p = 0.00), has a positive and significant influence on tax compliance among informal sector taxpayers in Osun State. The study concluded that the pathway from governance quality to informal sector tax compliance behavior in Osun State is the following: governance systems devoid of corruption, fairness of tax regulations, accountability of governance officials in the conduct of public businesses, and free and fair elections of democratically elected government representatives.