Abstract
Research Purpose: With Nigeria facing increasing pressure to broaden its tax base and combat tax evasion in the digital age, this study investigates the impact of electronic payment systems on tax evasion between 2012 and 2023. This analysis aims to understand how the adoption of mobile banking, ATM, POS, and web-based payments has influenced tax compliance in Nigeria.
Methodology: An ex-post facto research design was employed, utilising time series data extracted from the Statistical Bulletin of the Central Bank of Nigeria (CBN). The study applied multiple regression analysis using Ordinary Least Squares (OLS) to assess the relationship between electronic payment system components and tax evasion at a 0.05 significance level.
Findings: The regression analysis revealed a negative and significant impact of mobile banking payments, ATM payments, and web-based transfer payments on tax evasion in Nigeria. Conversely, point-of-sale (POS) payments exhibited a positive and significant impact on tax evasion.
Conclusion: The findings suggest that electronic payment systems, with the exception of POS payments, have contributed to reducing tax evasion in Nigeria. This implies that increased adoption of electronic payment methods can potentially lead to greater tax compliance.
Recommendations: The government and private sector should invest in expanding electronic payment infrastructure by fostering the development of ICT, innovation, and high-speed information networks. This will solidify the foundation for electronic payment systems and continue to curb tax evasion in Nigeria.
Key words: Electronic Payment System, Electronic Payments Infrastructures, Tax Evasion and Nigeria.
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