Public Governance Quality and Tax Compliance in Nigeria (2008-2018)

The study determined the effect of public governance quality on tax compliance in Nigeria between 2008 and 2018. The study employed secondary data. Data for governance quality indicators were sourced from World Bank Group (WBG), Worldwide Governance Indicator (WGI) while data for Gross Domestic Product (GDP) and tax revenue were obtained from Central Bank of Nigeria Statistical bulletin and Federal Inland Revenue Service Statistical report. Collected data were analyzed using unit root test and Autoregressive Distributed Lags (ARDL). The result from the study showed that in the short run, four public governance indicators had positive significant effect on tax compliance in Nigeria. This are government effectiveness (t = 4.6983, p˂0.05); political stability (t = 4.7842, p˂0.05); regulatory quality (t = 4.8861, p˂0.05); and control of corruption (t = 2.1792, p˂0.05). The result further showed that voice and accountability (t = -3.0554, p˂0.05) had negative and statistically significant effect on tax compliance in Nigeria. However, government effectiveness (t =3.4199, p˂0.05), rule of law (t = .99554, p˂0.05), political stability (t =10.9247, p˂0.05) and regulatory quality (t = 3.0209, p˂0.05) had positive and significant effect on tax compliance, while voice and accountability (t =-3.3592, p˂0.05) had negative and statistically significant relationship with tax compliance in the long run. The study concluded that strong government effectiveness, political stability, regulatory quality and rule of law play significant role in enhancing the level of tax compliance in Nigeria.