ABSTRACT

This study examines the effect of tax audits and tax investigations on tax compliance in Nigeria. Specifically, it explores the influence of field audits, desk audits, back-duty investigations, and forensic tax investigations on tax compliance.

A quantitative research approach was adopted, utilizing questionnaire to collect data, which were presented and analyzed using frequencies and percentages. Hypotheses were tested using the Chi-square method at a 5% level of significance, with data analysis conducted through the Statistical Package for the Social Sciences (SPSS) version 23.

The findings reveal that field audits significantly enhance tax compliance by detecting irregularities, fostering accountability, and reinforcing adherence to tax laws. Back-duty investigations contribute to tax compliance by recovering unpaid taxes and discouraging tax evasion, although concerns remain regarding the efficiency of tax authorities. Furthermore, forensic tax investigations play a crucial role in detecting tax fraud, improving trust in the tax system, and ensuring tax evaders are held accountable, despite scepticism about the consistency of enforcement. These findings highlight the importance of strengthening tax audit and investigation mechanisms to improve compliance levels in Nigeria.

Flowing from the findings, the study recommends amongst others that tax authorities should conduct regular and comprehensive field audits to ensure that businesses and individuals comply with tax laws.