The Effect of Motivation on Tax Compliance: A Case of Tax Administration in Bayelsa State of Nigeria

Abstract

The purpose of this paper is to determine the motivational factors leading to voluntary tax compliance with specific focus on selected taxpayers under the Pay-As-You-Earn (PAYE) system in Bayelsa State. Data was collected through the administration of structured questionnaire. Analyses were performed using version 19 of E-VIEW with ordinary least squares regression analysis and the Mann Whiteney U-test. It was found that public participation in tax policy formulation has no significant effect on tax compliance; that goal- oriented tax  policies will lead to an increase in tax compliance and that effective and satisfactory use of tax revenue by government will significantly increase the level of tax compliance in Bayelsa State. It was concluded that goal-oriented tax policies and judicious use of tax revenue are critical factors in taxpayers’ compliance. It is recommended that tax policies be tied to specific goals with government providing sufficient evidence of better utilization of tax revenue to achieve voluntary tax compliance.

Keywords: Tax Compliance, Motivation, Tax Administration,  Bayelsa State, Nigeria