Tax Compliance Mechanisms and Tax Yield in Ekiti State, Nigeria
Universally, the problem of ineffective tax compliance mechanisms undermines the standing and potential effectiveness of robust compliance measures in improving tax yield. Thus, the purpose of this study is to investigate the connection between tax yield and compliance mechanisms in Nigeria. The survey research design used, using Purposive Sampling Technique to select employees who had worked in the State Internal Revenue for a period not less than five years. Results showed that tax yield is significantly correlated with tax investigations and tax fines, but not significantly correlated with tax rates. The study concludes that an operational tax compliance mechanism supported by rigorous tax investigations, appropriate tax penalties, and clearly defined tax rates are good conditions for maintaining a fair and sustainable tax system. These elements work together to ensure that taxpayers meet their tax obligations, which in turn increases tax yields and supports vital public services and economic stability. It is recommended to strengthen tax compliance mechanisms through modern technology and data analytics. Strengthening tax investigations capacity with adequate resources and training ensures thorough examination in high-risk areas, as a rational and consistently enforced system of tax penalties helps prevent violations, and regular review and optimization of tax rates promotes economic growth and taxpayer fairness.
Keywords: Tax compliance mechanisms, tax yield, tax investigation, tax penalty, tax rate
Citation: Ogunrinde, O.P., & Fabiyi, F.C. (2024). Tax Compliance Mechanisms and Tax Yield in Ekiti State, Nigeria. International Journal of Innovative Research in Accounting and Sustainability, 9(4-Special Issue), 29-39.