Title: Effect Of Tax Compliance And Public Trust In Government Institutions In Nigeria
Authors: Maiwada Simon Zagana, Elias Samuel Unekwu, Adejo Odekina Okeme
Volume: 10
Issue: 9
Pages: 239-251
Publication Date: 2026/09/28
Abstract:
Nigeria's tax-to-GDP ratio of 7.2% remains among the world's lowest despite extensive administrative reforms, representing a revenue mobilization gap of approximately ?10 trillion compared to the African average of 16%. This study examines the relationship between tax compliance and public trust in government institutions using secondary data from FIRS, NBS, Afrobarometer (2015-2023), World Bank, OECD, and Transparency International. Employing a qualitative-descriptive analytical framework with trend and comparative analyses, the study finds that public trust significantly influences voluntary tax compliance yet only 25% of Nigerians express trust in federal institutions, down from 32% in 2015. Widespread corruption perceptions (CPI: 25/100), poor public service delivery, weak accountability mechanisms, and limited expenditure transparency systematically undermine taxpayer confidence and encourage evasion. While digital tax administration has improved efficiency (TaxPro Max registrations +581%, electronic filings +101%), the study demonstrates that administrative reforms alone are insufficient. Drawing on the Slippery Slope Framework and Fiscal Exchange Theory, the study concludes that sustainable domestic revenue mobilization depends fundamentally on rebuilding citizens' trust through accountable governance, transparency, and visible utilization of tax revenues. Recommendations include institutional reforms to enhance transparency, strengthen anti-corruption enforcement, expand digital tax systems, intensify taxpayer education, and demonstrate tangible linkages between tax payments and development outcomes.