Complexity of Nigerian Company Income Tax Act (CITA 2007): Readability assessment

Simplification of tax laws in terms of readability to aid easier and complete compliance by taxpayers is a key issue to achieving the objectives of every country’s tax system. The connection between language and compliance is obvious and understanding of the laws is crucial for all stakeholders to b...

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Main Author:	Umar, Musa Sulaiman
Format:	Thesis
Language:	eng eng
Published:	2013
Subjects:	K Law (General)
Online Access:	https://etd.uum.edu.my/5067/1/s809990.pdf https://etd.uum.edu.my/5067/2/s809990_abstract.pdf
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id	my-uum-etd.5067
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Saad, Natrah
topic	K Law (General)
spellingShingle	K Law (General) Umar, Musa Sulaiman Complexity of Nigerian Company Income Tax Act (CITA 2007): Readability assessment
description	Simplification of tax laws in terms of readability to aid easier and complete compliance by taxpayers is a key issue to achieving the objectives of every country’s tax system. The connection between language and compliance is obvious and understanding of the laws is crucial for all stakeholders to be able to carry out their respective responsibilities (Tan & Tower, 1992). In particular, simple tax laws would reduce the burden of compliance costs. Under the self-assessment system (SAS) regime, the simplicity of the tax laws is very important as most responsibilities defined by the laws have been shifted to the taxpayers. Thus, complexity of the tax laws may be an obstacle to both the taxpayer and the SAS. This study examines the readability of the Nigerian Company Income Tax Act 2007 (CITA 2007) and explores its association with compliance and administrative costs and SAS of taxation. The study employs readability formulae (Flesch Reading Ease Score and Flesch-Kincaid Grade Level), Average Sentence Length (ASL) and Percentage of Passive Voice (PPV) to determine the level of readability of the Act. Furthermore, this study adopts interview approach to triangulate the readability results obtained using the above formulae, and explores the association between the readability of the Act and compliance costs, administrative costs and SAS. The study found that the CITA 2007 has low level of readability which made the Act very difficult to understand. The low level of readability is also found to be associated with increased compliance costs as well as administrative costs, which subsequently impair the progress of the SAS in Nigeria. The study recommends that tax simplification policy in Nigeria should include language simplification in order to reduce compliance costs and administrative costs. With this tax simplification effort, it is hoped that tax compliance under the SAS can be improved and more tax revenue can be generated
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Umar, Musa Sulaiman
author_facet	Umar, Musa Sulaiman
author_sort	Umar, Musa Sulaiman
title	Complexity of Nigerian Company Income Tax Act (CITA 2007): Readability assessment
title_short	Complexity of Nigerian Company Income Tax Act (CITA 2007): Readability assessment
title_full	Complexity of Nigerian Company Income Tax Act (CITA 2007): Readability assessment
title_fullStr	Complexity of Nigerian Company Income Tax Act (CITA 2007): Readability assessment
title_full_unstemmed	Complexity of Nigerian Company Income Tax Act (CITA 2007): Readability assessment
title_sort	complexity of nigerian company income tax act (cita 2007): readability assessment
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2013
url	https://etd.uum.edu.my/5067/1/s809990.pdf https://etd.uum.edu.my/5067/2/s809990_abstract.pdf
_version_	1747827855462498304
spelling	my-uum-etd.50672022-04-10T02:54:11Z Complexity of Nigerian Company Income Tax Act (CITA 2007): Readability assessment 2013 Umar, Musa Sulaiman Saad, Natrah Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business K Law (General) Simplification of tax laws in terms of readability to aid easier and complete compliance by taxpayers is a key issue to achieving the objectives of every country’s tax system. The connection between language and compliance is obvious and understanding of the laws is crucial for all stakeholders to be able to carry out their respective responsibilities (Tan & Tower, 1992). In particular, simple tax laws would reduce the burden of compliance costs. Under the self-assessment system (SAS) regime, the simplicity of the tax laws is very important as most responsibilities defined by the laws have been shifted to the taxpayers. Thus, complexity of the tax laws may be an obstacle to both the taxpayer and the SAS. This study examines the readability of the Nigerian Company Income Tax Act 2007 (CITA 2007) and explores its association with compliance and administrative costs and SAS of taxation. The study employs readability formulae (Flesch Reading Ease Score and Flesch-Kincaid Grade Level), Average Sentence Length (ASL) and Percentage of Passive Voice (PPV) to determine the level of readability of the Act. Furthermore, this study adopts interview approach to triangulate the readability results obtained using the above formulae, and explores the association between the readability of the Act and compliance costs, administrative costs and SAS. The study found that the CITA 2007 has low level of readability which made the Act very difficult to understand. The low level of readability is also found to be associated with increased compliance costs as well as administrative costs, which subsequently impair the progress of the SAS in Nigeria. The study recommends that tax simplification policy in Nigeria should include language simplification in order to reduce compliance costs and administrative costs. With this tax simplification effort, it is hoped that tax compliance under the SAS can be improved and more tax revenue can be generated 2013 Thesis https://etd.uum.edu.my/5067/ https://etd.uum.edu.my/5067/1/s809990.pdf text eng public https://etd.uum.edu.my/5067/2/s809990_abstract.pdf text eng public masters masters Universiti Utara Malaysia Ariff, M., & Pope, J. (2002). Taxation and compliance costs in Asia Pacific economies. Sintok: Universiti Utara Malaysia. Asabor, M.(2012). The burden of tax compliance in Nigerian. Tribune news paper Retrieved from http://www.tribune.com.ng/index.php/tribune-business/49218-theburden-of-tax-compliance-in- nigeria 9/12/12. Blazic, H. (2004). Tax compliance costs of companies in Croatia. Ekonomickỳčasopis, 6, 723-38. Chan, S.Y.S., Cheung, D. K. C. & Ariff, M. (1999). 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Complexity of Nigerian Company Income Tax Act (CITA 2007): Readability assessment

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