An empirical study of the relationship between culture and personal income tax evasion in Nigeria

Tax evasion is a phenomenon present in all societies using taxes to finance government expenditures. There is a huge body of literature on the estimate of its extent. This study examines the relationship between culture (represented by legal enforcement, trust in government and religiosity) and personal income tax evasion in Nigeria. The study uses the chi square statistics and ordinary least squares regression to estimate the relationship between tax evasion and the independent variables namely legal enforcement trust in government and religiosity. Four hypotheses were tested. It was found that legal enforcement and trust in government have positive impact on personal income tax evasion in Nigeria. However, the study could not establish a significant relationship between tax evasion and the religious variables. Government policymakers should find the results of this study useful in assessing the likelihood of tax evasion from legal, political and religious perspectives, and in developing tax reform policies aimed at minimizing tax evasion. © EuroJournals, Inc. 2010