Transfer Pricing Regulations and Tax Revenue Generation in Nigeria
No Thumbnail Available
Date
2022-12
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Lead City University
Abstract
The financial link between States and their citizens is established by taxation, making tax
revenue the core of any country's revenue base. However, multinational companies' habitual
questionable profit-shifting practices have become commonplace and this resulted in the
enforcement of transfer pricing regulation to curb the menace. Hence, the study examined the
effect of Transfer Pricing Regulations (TPRs) on tax revenue generation in Nigeria. This study
adopted a cross-sectional survey research design, and the population was 749 staff of Federal
Inland Revenue Service (FIRS), Nigeria. All the 575 staff of FIRS in Lagos State were used as
the unit of analysis hence the adoption of total enumeration method. A validated questionnaire
was used to collect data. The Cronbach’s alpha reliability coefficients for the constructs ranged
from 0.65 to 0.95. A response rate of 85.7% was achieved for the study. Data were analysed
using descriptive and inferential statistics. Findings revealed that the level of tax profit prereform was low given the mean value of 2.05. TPRs had significant relative effect on tax profit
post reform (Adj. R
2 =0.373, p < 0.05, Q2 =0.322). TPRs had combined significant effect on tax
revenue performance (R
2 =0.321 p < 0.05, Q2 =0.262). Institutional capacity has significant and
full mediating effect on the interactions between TPRs and tax revenue performance in FIRS, Nigeria (β=0.286, t= 2.211, p < 0.05). This study concluded that TPRs affects tax revenue
performance in Nigeria. The study recommended that management of FIRS to re-energize their
commitment to TPRs implementation, compliance, and audit to improve revenue collection. Also, FIRS need to continue re-evaluating their strategic planning capability and develop their human
resource capability through constant training and upskilling. This is critical as they possess the
capacity to explain the positive influence of TPRs on tax revenue performance for FIRS, Nigeria. Keywords: Federal Inland Revenue Service, Institutional capacity, Multinational companies, Tax
revenue performance, Transfer pricing regulation. Word Count: 298
T
Description
Keywords
Citation
Kate Turabian