Infrastructure and Small Businesses' Adherence to Nigerian Tax Laws

Abstract

 Inadequate infrastructure is widely acknowledged as one of the main issues preventing SMEs from
 expanding globally. Notwithstanding this issue, it has been determined that the small and medium-sized company
 sector has the capacity to promote economic development and the fair distribution of economic activity. Because
 of this, governments have recognized the need to increase tax income from SMEs in order to cover government
 spending. However, many SMEs seem to be noncompliant with tax laws, which leads to a significant disparity in
 tax revenue from SMEs. Although there is a wealth of literature on SMEs and infrastructure, it is important to
 emphasize that not many studies have examined the impact of infrastructure supply on SMEs' tax compliance,
 necessitating empirical support. This paper's goal is to demonstrate how infrastructure supply affects SMEs' tax
 compliance. A survey research design was used for the investigation. 389 of the 400 SMEs owners in Lagos and
 Oyo States who were purposefully and randomly chosen returned the completed surveys. Ordered logistic
 regressions were used to analyze the data using both descriptive and inferential statistics. According to the
 research, tax compliance among SMEs in Nigeria is positively and significantly correlated with the availability of
 infrastructure (α=0.619, t (395) = 16.854, p=0.000). The research found that infrastructure availability had a
 major impact on tax compliance among Nigerian SMEs. According to the report, the Nigerian government should
 implement policies that would support the growth of small business owners in the country, especially the
 implementation of financial inclusion and economic stimulation as well as ongoing tax education to promote tax
 compliance