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Enhancing Tax Compliance in Non-Enabling Institutional Contexts
Enhancing tax compliance in non-enabling
October 24, 2018
Dr Bongo Adi (Lagos Business School)
Professor Kenneth Amaeshi (University of Edinburgh, UK)
Godson Ikiebey (ESG Advisory)
Taxation is a social behaviour underpinned by legal and ethical
As such, the framing of taxation as a responsible business
behavior may enhance tax compliance (Sikka, 2010).
However, to understand taxation as a social behavior
underpinned by legal and ethical norms, context matters!
The Slippery Slope Framework (Kirchler et al. 2008) claims that tax
compliance is a function of the perceived power of and trust in tax
Tax compliance is highest where perceived power and trust are high and
lowest where perceived power and trust are low.
Most weak or non-enabling environments are characterised by low trust
and low power (Amaeshi et al., 2015; Sikka, 2010). Does it then mean
that tax compliance is not possible in such contexts?
However, we see evidence of tax compliance in non-enabling
environments despite the predictions of the Slippery Slope Framework.
How can one explain tax compliance in non-
enabling institutional contexts?
How can tax compliance be enhance in non-
enabling institutional contexts?
We analysed data from the following sources:
Three focus group discussion (FGD)sessions (FGDs) with
diverse participation of business owners, tax practitioners and
tax authorities- 28 participants in all.
Followed by five key informant interviews with subject matter
A Tax Research Group with 38 participants on WhatsApp.
The Nigeria tax environment is low trust and low enforcement
as voluntary tax compliance is low. Tax as CSR is secondary!
Those who easily comply and those who do not easily comply
rationalise their justifications for or against from similar broad
However they differ in the framing of their justifications;
positive for compliance and negative for non-compliance.
These disparate framing sustain both compliance and non-
Low trust and
“Why will l encourage tax
payment by citizens where
borehole, buy generators
and construct roads
leading to their houses”?
“Tax payment is a responsible
business practice because of
its developmental purpose,
which include: social
amenities, public facilities,
security and safety, creating
an enabling environment for
Tentative Findings (examples)
1st order coding Compliance framing Non-compliance framing 2nd order
Economic, social and
“Tax payment is a responsible business
practice because of its developmental
purpose, which include: social amenities,
public facilities, security and safety,
creating an enabling environment for
employment opportunities” (Interview)
“Why will l encourage tax payment by
citizens where individuals provide
borehole, buy generators and
construct roads leading to their
houses”? (WhatsApp Group)
compliance risks and duty
“I pay my taxes because I want to sleep
and sleep well” (Interview)
“But why will l support tax payment in
an environment where such funds will
end up in politicians pocket without
any consequences” (WhatsApp
virtuousness and education
“I pay my taxes. I pay because it is moral
and a civic responsibility” (FCDs)
“he nor dey pay tax, na me go come
pay?”(If he does not pay tax, am I the
one to pay?- FCDs)
In essence, justification for tax behaviours is not homogenous
To counteract or enhance the disparate framing deployed in
sustaining the justification of tax behaviours, the tax authority
would require an heterogeneous messaging approach.
Framing of tax compliance as a responsible business practice
in the light of these justification frames needs to be further
explored for messaging fit
Contribution to the literature:
Understanding rationalisations is important to understanding
tax behaviours and motivations.
Contribution to practice and policy:
The findings will enable tax authorities to develop strategies
to fit the rationalisations advanced by the heterogeneous
Emerging areas of research interests
How can the tax ecosystem in Nigeria be strengthened?
What do government officials (apart from the FIRS) make of
the trust and accountability deficits in the system?
Is there a place for an independent tax
accountability/communication body in the Nigerian tax