Impact of tax evasion and tax avoidance on government revenue generated in Nigeria

Abstract

This study examined the impact of tax evasion and avoidance on government revenue generated in Nigeria. This research used an explanatory and descriptive design. Along with applying library research techniques to obtain the necessary data, 100 questionnaires were administered to FIRS employees in Nigeria. From the research analysis, tax evasion and avoidance has a significant and negative impact on the Nigerian economy, there exists a strong and negative relationship between tax evasion and avoidance and government revenue generated, inadequate tax administration has a negative and significant impact on the Nigerian economy and inadequate tax legislation causes tax evasion or avoidance. Based on the research findings, the study recommends that a comprehensive strategy combining institutional building, behavioral interventions, and policy reforms are needed to solve these issues. Enacting comprehensive tax changes is necessary to streamline tax laws, eliminate loopholes, and improve accountability and transparency in the tax administration procedures. Additionally, funding capacity-building programs is essential to improve the efficiency of tax authorities in observing, prosecuting, and penalizing noncompliant taxpayers in order to discourage tax evasion and guarantee the integrity of the tax system.

Keywords: Tax evasion, Tax avoidance, Government revenue, Nigeria