Corporate Governance Practices and Ethical Tax Payers’ Behaviors of Small and Medium-Scale Enterprises in Lagos State.

Abstract:

Tax revenues are essential for governance, as many government functions are hindered without them. This study examined the impact of corporate governance practices and ethical taxpayer behaviours of small and medium-scale enterprises in Lagos State. The study employed the survey research design. Data were collected from primary sources through structured questionnaires distributed to SMEs across various sectors. The study adopted a Simple random sampling technique. The study population comprises 11,643 registered small and medium-scale enterprises (SMEs) in Lagos. A sample size of 372 was selected using a survey system provided on www.surveysystem.com/sscalc. Data collected were analysed using descriptive statistics and regression analysis. It was found that while independent board members can enhance financial discipline and adherence to tax obligations, their effectiveness depends on several factors, including board expertise, regulatory environment, and access to financial advisory services. The study concluded that board composition plays a role in SMEs’ tax compliance behavior, though the extent of its influence varies. The study recommended that SMEs should consider appointing board members with financial and tax expertise to enhance compliance and decision-making processes.