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Effect of Nigeria's Tax Reform Policies on Corporate Tax Compliance: The Mediating Role of Digital Accounting Systems and the Moderating Role of Firm Size

Abstract

Nigeria has implemented several tax reform policies aimed at broadening the tax base, enhancing revenue generation, improving tax administration, and promoting voluntary corporate tax compliance. Despite these reforms, many organizations continue to exhibit varying levels of compliance due to challenges such as inadequate technological infrastructure, regulatory complexity, and differences in organizational capacity. This study investigates the effect of Nigeria's tax reform policies on corporate tax compliance, while examining the mediating role of digital accounting systems and the moderating role of firm size. Specifically, the study seeks to determine whether the implementation of digital accounting systems enhances the effectiveness of tax reform policies in improving compliance and whether the magnitude of this relationship differs between small, medium, and large firms.

The study is anchored on Institutional Theory and the Technology Acceptance Model (TAM), which explain how regulatory pressures and technological adoption influence organizational compliance behavior. A quantitative research design will be adopted, utilizing a structured questionnaire to collect primary data from finance managers, accountants, tax officers, and other relevant personnel of registered companies operating in Nigeria. A stratified sampling technique will be employed to ensure adequate representation of firms of different sizes and sectors. The collected data will be analyzed using descriptive statistics and Structural Equation Modeling (SEM) to evaluate the direct effect of tax reform policies on corporate tax compliance, the mediating effect of digital accounting systems, and the moderating effect of firm size.

It is anticipated that the findings will reveal a significant positive relationship between Nigeria's tax reform policies and corporate tax compliance. The study further expects that digital accounting systems will partially mediate this relationship by improving financial reporting accuracy, tax record management, and the efficiency of tax filing processes. In addition, firm size is expected to moderate the relationship, with larger firms likely benefiting more from tax reforms due to their greater financial, technological, and human resource capabilities, while smaller firms may experience compliance constraints arising from limited resources and lower technological readiness.

The study will contribute to the existing body of knowledge by integrating mediation and moderation mechanisms into the relationship between tax reform policies and corporate tax compliance within the Nigerian context. The findings will provide practical insights for policymakers, the Federal Inland Revenue Service (FIRS), corporate organizations, accounting professionals, and software developers on the importance of strengthening digital accounting infrastructure and designing tax policies that accommodate firms of varying sizes. Ultimately, the study is expected to support the development of more effective tax reform strategies that enhance compliance, improve tax administration, and foster sustainable economic growth in Nigeria.

Keywords: Nigeria's tax reform policies, corporate tax compliance, digital accounting systems, firm size, tax administration, technology adoption, mediation, moderation, Structural Equation Modeling (SEM), Nigeria.