Socio-Economic Issues and Tax Compliance Behaviour: An Analysis of Residential Areas in Lagos State, Nigeria

Due to its immense role in ensuring economic stability is achieved, tax and tax compliance is and continually will be a very important issue not only for government and policy makers but for researchers as well. Most taxpayers, individuals and corporate entities alike are presumed to be negatively inclined towards paying taxes and no one looks forward to paying taxes without complaining. Socio-economic status (income level, educational level, and employment status), social economic issues (income inequality, poverty level, and informal economy), government policies and tax administration effectiveness were considered in determining how Lagos state residents residing in various areas are tax compliant. Using a Federal Government institution as case study, descriptive statistics and regression analysis were used to determine how these variables affect the tax compliant level of Lagos state residents and the study found that socio economic status, socio economic issues as well as government policies has no statistical impact on tax compliance. However, effective tax administration possesses a statistically significant impact on how compliant Lagos State residents are to paying taxes. The study concluded that policymakers should reconsider strategies aimed solely at altering socioeconomic conditions or adjusting tax policies to improve tax compliance rate amongst all social classes in Lagos State.