Back Duty Audit and Companies Income Tax Compliance in the Federal Capital Territory, Nigeria: The Moderating Role of Tax Officers’ Expertise

Abstract

Low tax compliance is a serious problem that has continued to ravage the Nigerian tax system which has forced the government to source for an alternative means of financing its budget.  To tackle this issue, the government has introduced tax audit to enhance tax compliance. This study examines back duty audit and companies income tax compliance in Nigeria, the moderating role of tax officers’ expertise. The population of the study comprises 304 FIRS staff in the audit department in the Federal Capital Territory, Abuja. Taro Yamane formula was used to determine a sample size of 173. Multiple regression was used to analyze the data and to test the hypotheses of the study with the help of STATA version 13. The result revealed that back duty audit has a positive and significant effect on companies income tax compliance. The moderator, tax officers’ expertise has a positive and significant effect on companies income tax compliance. When the moderator interacted with back duty audit, the result was positive and statistically significant. The study recommended that the FIRS should emphasize more on routine audit because it helps to increase compliance by companies now and in the future. Secondly, the tax officers should constantly reach out to companies’ representatives to help them resolve complexity in the tax laws.