The Impact of Taxpayers' Perception of the Tax System on Tax Compliance in Ondo State

Abstract

Tax compliance remains a major challenge in many developing countries, including Nigeria, despite its importance as a source of government revenue for financing public goods and services. Recent studies have shown that taxpayers' perceptions of the tax system play a significant role in shaping compliance behavior. This study examined the impact of taxpayers' perception of the tax system on tax compliance among individual taxpayers in Ondo State, Nigeria. Specifically, the study investigated the influence of trust in tax authorities, fairness of the tax system, corruption among tax officials, and the reasonableness of tax charges on tax compliance behavior. The study adopted a survey research design. Primary data were collected through structured questionnaires administered to 367 individual taxpayers selected from Ondo State. Descriptive statistics, including frequency distributions and percentages, were used to analyze respondents' demographic characteristics and perceptions of the tax system, while the Pearson Chi-Square test was employed to examine the relationship between taxpayers' perceptions and tax compliance. The findings revealed that a majority of respondents believed that trust in tax authorities enhances tax compliance, while perceptions of fairness and reasonable tax charges encourage voluntary compliance. Conversely, corruption among tax officials was perceived as a major factor that discourages tax compliance. The Chi-Square analysis indicated a statistically significant association between taxpayers' perception of the tax system and tax compliance (χ² = 25.490, p < 0.05). The study concludes that taxpayers' perceptions of the tax system significantly influence their willingness to comply with tax obligations in Ondo State. The study recommends that tax authorities strengthen transparency, accountability, and fairness in tax administration, intensify anti-corruption measures, and improve taxpayer education and public awareness programs to enhance voluntary tax compliance and increase internally generated revenue.

Keywords: Tax Compliance, Taxpayers' Perception, Tax System, Trust in Tax Authorities, Tax Fairness, Tax Administration, Tax Morale, Corruption.

DOI: 10.7176/EJBM/18-6-01

Publication date: June 30^th 2026