Addressing Tax Evasion and Avoidance through Effective Tax Audit and Investigation in Cross River State, Nigeria

International Journal of Research and Scientific Innovation (IJRSI) | Volume VI, Issue VI, June 2019 | ISSN 2321–2705

Addressing Tax Evasion and Avoidance through Effective Tax Audit and Investigation in Cross River State, Nigeria

Sunny B.Beredugo, Joseph U. B. Azubike & Paul I. Mefor

Department of Accounting, College of Management Sciences, Michael Okpara University of Agriculture, Umudike, Abia State, Nigeria

Abstract – The paper addresses tax evasion and avoidance through effective tax audit and investigation in Cross River State.The study adopts survey research design, while data were collated from staff of FIRS and SIRS in Cross River State. The Chi-square (x2) statistical tool was employed to analyze respondents’ opinion on the effect of tax audit and investigation in addressing tax evasion and avoidance. The results revealed that, while there is a significant difference in the opinions of respondents on the effect of tax audit on tax evasion and avoidance in Cross River State; there was no significant difference in their perception on the effect of tax investigation on tax evasion and avoidance. Penalty also significantly affected tax evasion and avoidance.Identified also was that the thoroughness of the tax audit will encourage taxpayers to be more prudent in complying with tax returns and that the strengthening of tax audit and investigation will wipe away tax evasion and avoidance in Nigeria. It was therefore recommended that tax payers should be educated during tax audits and penalty should be adequately implemented to serve as a deterrent to tax evader and avoiders so as to increase tax compliance and government revenue.

Keywords: tax evasion, tax avoidance, tax audit, tax investigation, penalty

I. INTRODUCTION

Tax evasion and avoidance is a growing concern in today’s economy. Nigeria is presently confronted with social, political and administrative difficulties in establishing a sound public finance system. As a consequence, the country is vulnerable to tax evasion and avoidance, and to salvage some of these encumbrances, require among other approaches, tax audit and investigation that is aimed at increasing the
level of compliance with the relevant tax laws, thus improving tax revenue for the country.In addition, it is quite worrisome that not enough attention has been paid to the system of tax audit and investigation in reducing tax evasion and avoidance in Nigeria.
According to Igbeng, Beredugo, and Adu (2015:1), “the Nigerian tax system has undergone several reforms, yet, it is still lacking in the unifying theme of achieving high tax compliance”.

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