Tax Compliance and Revenue Generation in Enugu State: An Assessment of Small Business Owners in Nsukka Local Government Area

Tax compliance by small business owners remains one of the most persistent challenges confronting sub-national governments in Nigeria, undermining their capacity to fund public goods and stimulate economic development. This study assesses the relationship between tax compliance behaviour and revenue generation in Nsukka Local Government Area, Enugu State. The study is anchored on the Slippery Slope Framework, which identifies trust in tax authorities and the power of tax enforcement as the two principal dimensions shaping taxpayer compliance decisions. A quantitative survey design was adopted. The study population comprised 263 registered small business owners within Nsukka LGA. A sample of 158 respondents was selected using systematic random sampling. The data collection instrument was a well-structured questionnaire validated through expert review and pre-testing. Multiple regression analysis and chi-square tests were applied to analyse the data. Findings reveal that tax knowledge, perceived fairness of the tax system, and the effectiveness of the Enugu State Board of Internal Revenue significantly predict compliance behaviour among small business owners. The study also finds that punitive enforcement without corresponding improvements in service delivery reduces voluntary compliance rates over time. It is concluded that sustainable tax compliance in Nsukka and similar urban-rural LGAs depends on building taxpayer trust through transparent and accountable revenue administration. The study recommends that tax authorities invest in public enlightenment campaigns, simplify the tax filing process, and strengthen taxpayer service desks to encourage voluntary compliance.

Keywords: Tax compliance, revenue generation, small business, Slippery Slope Framework, Enugu State