INFLUENCE OF INSTITUTIONAL QUALITY ON TAX FRAUD MANAGEMENT IN SOUTH WEST NIGERIA STATE

Tax revenue is to be the surest way for the government to finance its budget but institutional deficiency is one of the factors militating against effective tax revenue in Nigeria. This study examined the influence of institutional quality on tax fraud management in South West Nigeria. This study used a quantitative method of data collection with a population of 504,263; the sample size was 400. The inferential statistics of the Partial Least Square Structural Equation Model (PLS-SEM) were used to analyze the data collected. The result of the finding indicated that in the context of control of corruption (β = -0.817, t = -22.043, p=0.000 < 0.05), rules of law (β = -0.116, t = -2.392, p=0.000 < 0.05) and quality of regulatory (β = -0.204, t = -2.169, p =0.043 < 0.05); there was a significant negative relationship between the variables of interest (control of corruption, rule of law and quality of regulatory) and tax fraud management in South West Nigeria. This study concluded that control of corruption, rule of law, and quality of tax regulation by the government reduce the tendency by which taxpayers will engage in tax fraud in South West Nigeria. It is also concluded that the taxpayers’ low rating on control of corruption and adherence to the rule of tax laws by the government and its agency contributed to the high rate of tax fraud among the taxpayers in South West Nigeria. This study, therefore, recommended that government live up to the expectation of taxpayers to block corruption, enhance adherence to the rule of law and maintain the high quality of tax regulatory agencies (FIRS) for better performance of tax revenue generation.