COMPARATIVE STUDY ON THE EFFECTS OF TAX AUDIT ON VALUE ADDED TAX (VAT) COMPLIANCE IN DEVELOPING COUNTRIES. A STUDY OF NIGERIA AND BANGLADESH

Jane Chinyere Akujor 1 and Fineboy Ikechi Joseph 2

ABSTRACT
Nigeria like many other developing countries often place much focus on the dissemination of tax revenue, while undermining the sternness of VAT audit in enhancing favourable VAT compliance. It is equally preposterous that countries like Bangladesh and others that are less developed than Nigeria are performing better in the area of VAT audit and compliance. The study therefore compares the effect of tax audit on VAT compliance between Nigeria and Bangladesh. Secondary data were obtained from Central Bank of Nigeria statistical bulletin, National Board of Revenue statistics Bangladesh and World Bank. Data on VAT and unremitted VAT discovered through VAT audit for the period of 1994 to 2017 were basically used. The study adopts the ex-post facto research design. The Ordinary Least Square and independent t-test analytical tools were employed. The result shows that VAT audit significantly affects the VAT proceeds in Nigeria and Bangladesh. There is also no significant difference in the VAT audited between Nigeria and Bangladesh. Although, unremitted VAT and VAT proceeds are high in Bangladesh; neither does Nigeria nor Bangladesh has a better VAT compliance compared to each other’s for the period under review. It is recommended that the scope of tax audit should be wider in such a way that it will ensure proper submission of accurate and current returns for proper computation and sanctions by relevant tax authorities should be applied when necessary. Finally, tax authorities should provide a regular seminar and workshop to the tax audit
personnel for improving their efficiency and effectiveness.
Keywords: Tax, Tax audit, VAT audit, VAT compliance, Nigeria, Bangladesh, VAT proceeds.

DOWNLOAD FULL TEXT HERE

https://afra.org.ng/wp-content/uploads/2022/03/pro2019001.pdf

Leave a Reply

Your email address will not be published.