EFFECT OF GOVERNMENT ACCOUNTABILITY ON VOLUNTARY TAX COMPLIANCE AMONG SMALL AND MEDIUM SCALE BUSINESS IN ABUJA METROPOLIS

Abstract

Voluntary tax compliance among SMEs in Nigeria enhances internally generated revenue (IGR), enabling infrastructure development, and ensuring business sustainability and survival. Evidence from literature showed that SMEs non-compliance with tax laws is driven by lack of government accountability, complex and high tax burdens and poor awareness of regulations. Literature has shown that transparency displayed by government of countries increased trust in government, compliance with tax laws and enhanced revenue. Therefore, this study examined the effect of government accountability and voluntary tax compliance among SMEs in Abuja Metropolis. The study adopted the survey research design and collected data through questionnaire administered to SMEs proprietors, with a population of 42,421 (Forty-two thousand, four hundred and twenty-one) and a sample size of 430. Multiple regression technique was used in analyzing the data. Findings from the study revealed a significant relationship between transparency in government, openness in government and voluntary tax compliance. The study concluded that government accountability enhanced Voluntary Tax Compliance among SMES in Abuja metropolis. The study recommended that government and its agencies should be more accountable to its citizens in terms of tax revenue utilization for the provision of infrastructure in order to enhance voluntary compliance. The government should provide education on voluntary tax compliance to SMEs in order to boost tax morale, expand tax net and achieve more sustained voluntary tax compliance that will increase revenue.