RELATIONSHIP BETWEEN TAX AUDIT ENFORCEMENT AND TAX COMPLIANCE AMONG MICRO, SMALL, AND MEDIUM ENTERPRISES IN NIGERIA

This study examines the relationship between tax audits and tax compliance among Micro, Small, and Medium Enterprises (MSMEs) in Nigeria. Tax revenue remains the primary source of government income for financing public services, infrastructure, and economic development initiatives, including support for MSMEs. Despite constitutional provisions and tax policies that mandate voluntary compliance, Nigeria continues to experience low tax compliance, characterized by underreporting of income, non-remittance of taxes, and failure to file tax returns. This challenge has significantly constrained government revenue generation amid increasing public expenditure driven by population growth and development needs. The study highlights tax audits as a vital mechanism for promoting compliance by encouraging accurate income declaration, timely tax payments, and proper filing of tax returns. It concludes that strengthening tax audit processes, enhancing enforcement, and improving taxpayer awareness are essential strategies for increasing tax compliance and expanding the government's revenue base to support sustainable economic growth.