Background of the Study
Infrastructure development is a cornerstone of economic growth and social progress. Roads, schools, healthcare facilities, and water systems all rely on sustained public funding, much of which comes from taxes. Tax compliance ensures a steady flow of resources necessary to build and maintain critical infrastructure. In Makurdi Local Government Area, the capital of Benue State, inadequate infrastructure remains a pressing challenge. Despite the potential for tax revenue to transform the region, issues such as tax evasion and inadequate collection systems hinder progress.
Globally, countries with high levels of tax compliance demonstrate better infrastructure outcomes, as revenues are efficiently allocated to meet public needs. Makurdi LGA faces a dual challenge: encouraging taxpayers to comply with tax regulations and ensuring that collected revenue is transparently used to fund infrastructure projects. This study explores the relationship between tax compliance and infrastructure development, emphasizing how compliance can drive improvements in public goods and services within Makurdi LGA.
Statement of the Problem
The poor state of infrastructure in Makurdi LGA, including deteriorating roads, inadequate schools, and unreliable healthcare facilities, reflects the inefficiency of revenue collection and allocation. While the government has implemented tax reforms, compliance remains low, limiting funds available for infrastructure development. This study seeks to address the gap between potential and actual infrastructure outcomes due to tax noncompliance.
Aim and Objectives of the Study
To evaluate the level of tax compliance in Makurdi LGA.
To investigate the relationship between tax compliance and infrastructure development in the area.
To identify barriers to effective tax compliance and infrastructure funding.
Research Questions
What is the current level of tax compliance in Makurdi LGA?
How does tax compliance affect infrastructure development in the area?
What factors hinder effective tax compliance and infrastructure funding in Makurdi LGA?
Research Hypotheses
There is no significant relationship between tax compliance and infrastructure development in Makurdi LGA.
Tax compliance does not significantly influence the state of infrastructure in Makurdi LGA.
Barriers such as corruption and lack of enforcement do not significantly affect tax compliance.
Significance of the Study
The study provides insights into how tax compliance can improve infrastructure development in Makurdi LGA. Policymakers and tax authorities will benefit from recommendations aimed at enhancing compliance and optimizing infrastructure investment.
Scope and Limitation of the Study
The research focuses on Makurdi LGA, examining taxpayers' behavior, tax compliance, and its impact on infrastructure. Constraints include data availability and respondents’ willingness to share information.
Definition of Terms
Infrastructure Development: The construction and improvement of essential facilities such as roads, schools, and hospitals.
Tax Compliance: The act of adhering to tax laws by timely filing and paying taxes.
Public Revenue: Funds collected by the government to finance public services.
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