DETERMINANTS OF TAX COMPLIANCE AMONG MSMEs IN NORTH CENTRAL NIGERIA: AN INTEGRATED REVIEW OF THEORETICAL AND EMPIRICAL EVIDENCE

Abstract

The fiscal capacity of state governments in North Central Nigeria has long been compromised by tax non-compliance among Micro, Small, and Medium Enterprises (MSMEs). Despite MSMEs accounting for more than 96% of all businesses in the region, these governments routinely report among the lowest Internally Generated Revenue figures in the nation. In order to investigate the theoretical and empirical evidence on five determinants of MSME tax compliance behavior, attitude toward taxation, social norms, tax knowledge, perceived fairness, and benefits received, this paper draws on a systematic narrative review of peer-reviewed literature published between 2012 and 2025. The review is guided by an integrated framework that incorporates Social Exchange Theory, the Theory of Planned Behavior, the Slippery Slope Framework, and Institutional Theory. Studies from Nigeria and similar developing economies are prioritized. Positive tax attitudes, strong peer compliance norms, sufficient knowledge of tax obligations, perceived administrative fairness, and visible government service delivery all independently increase voluntary compliance among MSMEs in a variety of contexts. While foundational studies in the region identified high tax rates, procedural complexity, and multiple taxation as the main structural barriers that have persisted for more than ten years, direct evidence from the North Central zone confirms that both tax knowledge and the perceived fairness of the tax system are statistically significant predictors of voluntary compliance. Given the ongoing implementation of the 2025 National Tax Reforms across the region's states, the review highlights a glaring lack of integrated, multi-determinant empirical research tailored to this context. To inform reform design and direct the work of revenue authorities in North Central Nigeria, an empirical study that models all five determinants within a single framework is both a practical and a theoretical necessity.