E-Payment Rate and Tax Evasion Rate: Evidence from Listed Consumer Goods Manufacturing Firms in Nigeria

Abstract

In Nigeria, corporate taxation provides government with revenue from companies operating in various sectors of the economy, including the consumer goods manufacturing sector. However, the ability of government to generate sufficient tax revenue is constrained by tax evasion, tax avoidance, weak compliance and administrative challenges. The study therefore, examined effect of e-payment rate on the tax evasion rate of listed consumer goods manufacturing firms in Nigeria.  The study employed ex-post facto research design through secondary data, fourteen (14) out of twenty three (23) firms was purposively selected based on the year of incorporation, availability and accessibility to publish financial report of the listed consumer goods manufacturing firms. Generalized Least Squares (GLS) Analysis was used to examine the effect of e-payment rate on the tax evasion rate of listed consumer goods manufacturing firms in Nigeria. GLS showed that all the explanatory variables; E-filing rate (−0.163563), E-payment rate (−0.115597), Digital tax invoicing (−0.001264), Technology infrastructure index (−0.001434), and Technology skill and infrastructure (−0.001262) have statistically significant negative effects on tax evasion rate. The study established that E-payment rate influence tax evasion rate of listed consumer goods manufacturing firms in Nigeria. It is recommended that, listed consumer goods manufacturing firms should increase the adoption and utilisation of electronic payment systems.