The Role of Information About Peer Behaviour on Tax Compliance in Nigeria: An Experimental Study
Domestic revenue mobilization is a priority for many SSA countries. Yet, low tax compliance constitutes a major challenge to this drive. Improving tax compliance will require an understanding of the underlying factors influencing a taxpayer’s decision to either pay taxes or not. However, little is known about tax compliance behaviour in most SSA countries; insights that are indispensable to reforming policies and designing interventions aimed at improving tax compliance. Extending the scope of analysis beyond conventional adaptations of Becker’s (1968) economics-of-crime model and using methods similar to Alm et al. (2015), we propose an experimental design to identify the role of peer effect on tax compliance in Nigeria’s context. Our approach examines the role of information about the tax compliance behaviours of neighbours on an individual’s decision to pay taxes. Resulting insights will contribute to a multi-faceted policy approach for improving tax compliance in Nigeria.