Tax Quality Services, Audit, and Revenue Generation: Evidence from North Central Nigeria

Abstract

This study examined the effects of tax service quality and tax audit effectiveness on revenue generation in North Central Nigeria, using public choice theory as the framework. It pioneers the application of this theory to Nigerian tax administration and employs multinomial logistic regression to model categorical revenue outcomes. A survey research design was adopted, collecting primary data from 356 respondents across four states using structured 5-point Likert scale questionnaires. Revenue generation was categorized as high (32.6%), moderate (39.9%), and low (27.5% - reference). Tax quality services and audit effectiveness were measured across multiple standardized dimensions. The regression analysis revealed significant positive relationships between both predictors and revenue generation. For high revenue generation, tax service quality showed a coefficient of 0.734 (p = 0.026), representing a 108% increase in odds, while tax audit effectiveness had a stronger effect (coefficient = 0.952, p = 0.005), indicating a 159% increase. For moderate revenue generation, coefficients were 0.281 (p = 0.041) and 0.325 (p = 0.032) respectively. Findings show that tax audits exert a stronger influence than service quality improvements. The study recommends that tax authorities prioritize audit capacity development through investments in modern audit technology, personnel training, and expanded sectoral coverage. Additionally, integrated tax administration frameworks should combine proactive taxpayer services with strong enforcement. Lastly, regional coordination platforms should be established across North Central states to share best practices and ensure continuous improvement in tax administration strategies.