Accounting and Finance

Tax evasion and avoidance are both phenomena that are probably as old as taxation itself. Literature revealed that tax avoidance and evasion represent some of the perplexing problems facing the Nigerian economy. The result of tax evasion and avoidance is tax revenue loss which may cause serious damage to the proper performance of the public sector, threatening its capability to finance public expenditure. Therefore, this study examined the factors that are influencing tax evasion and tax avoidance in Nigeria. The study adopts a survey research design. Six-point rating scaled questionnaire starting from strongly agree to strongly disagree was used to collect primary data from 120 selected small and medium scale businesses in Lagos. The results of the analysis revealed that the low quality of the service in return for tax does significantly influence tax avoidance and evasion in Nigeria. Furthermore, tax system and perception of fairness, low transparency and accountability of public institutions, and high level of corruption do significantly influence tax avoidance and evasion in Nigeria. The study recommends that urgent steps should be taken by public office holders to live up to expectation when it comes to transparency, accountability and the war against corruption