Effect of Corporate Tax Compliance Variables on Petroleum Profit Tax Compliance in Nigeria, the Mediating Effect of Tax Complexity: A Proposed Framework

Abstract

Tax compliance literature has documented extensive evidence confirming the influence of tax knowledge on tax compliance, so also corporate taxpayers employ tax agent who are perceived to be experts in the provisions of tax laws, which eventually results in minimizing errors in filing returns and eventual tax compliance. However, not much has been written in relation to petroleum
profit tax compliance in this regard. Moreover, the evidences regarding the effects of tax knowledge and tax agents on tax compliance could justify the need to explore for a mechanism that could explain why these variables affect tax compliance from the perspective of petroleum profit taxation. Hence, complexity was identified as a possible mechanism through which tax
knowledge and tax agents could influence petroleum profit tax compliance. Consequently, the paper presents a proposed framework on the mediating effect of tax complexity on the relationship between tax knowledge, tax agents and petroleum profit tax compliance among oil companies in Nigeria. If validated, the outcome will benefit policymakers in oil producing countries in devising means for enhancing tax knowledge amongst taxpayers and encouraging them to employ tax agents which may eventually improve tax compliance.