ABSTRACT
The study examined tax evasion and economic growth in Nigeria. Three specific research objectives was raised for the study, they were to examine the causes of tax evasion that affect the economic growth, the effect of tax evasion on the economic growth and to identify ways of preventing tax evasion in affecting the economic growth of Nigeria. The population of this study consisted of individual taxpayers, businesses, and other relevant entities operating within Edo State. However, for the purpose of this study, the target population was limited to SMEs in paying their tax regularly. In Edo State, there are more than seven thousand eight hundred and ninetyseven (7,897). In other to get the sample size for this study, Taro Yamane (Yamane, 1973) formula was used, the sample size was 98.75 from the total population. The data collected was analyzed in regard to the research questions and hypotheses for the study using the Statistical Package for Social Science (SPSS 22). These methods include both descriptive and inferential method such as mean and standard deviation, while regression analysis will be used to test the hypotheses. It was concluded that high tax rates, low tax morale, and lenient penalties are significant factors driving tax evasion, which negatively impacts economic growth. Tax evasion is perceived to widen wealth inequality, hinder government functionality, and contribute to fiscal deficits and debt accumulation. To combat these issues, respondents suggest that reducing tax evasion through strengthened compliance measures, effective tax policies, and international cooperation is crucial for enhancing economic growth.
