97 © 2024 by the authors; licensee Eastern Centre of Science and Education, USA Asian Business Research Journal Vol. x, 97-104, 2024 ISSN: 2576-6759 DOI: 10.55220/25766759.207 © 2024 by the authors; licensee Eastern Centre of Science and Education, USA Demographic Factors and Personal Income Tax Compliance in South-West States, Nigeria: Empirical Analysis Adekoya A. Augustine1  1Adekoya A. Augustine. Department of Accounting, Babcock University, Ilisan-Remo, Ogun State, Nigeria. Email: sanyaaustine08@yahoo.com Abstract Personal Income Tax (PIT) compliance is a critical issue to state governments and tax authorities because of the high rate of its non-compliance among individual taxpayers. This non-compliance attitude adversely affects the state sustainable development and economic performance. Many researches have been conducted on taxpayers’ compliance, but not many considered the influence of Demographic Factors (DF) on PIT Compliance Behaviour (CB) at the state level. This study examined the probable influence of DF on PIT CB in selected state in South-West, Nigeria. The study adopts survey research design and random sampling techniques. Six hundred copies of questionnaire were distributed, and this achieved 84.3% response rate. Descriptive and inferential statistics were adopted to analyze data at 5% significance level. The study shows that DF positively influenced PIT CB among individual taxpayers in the study states (AdjR2=0.033, F(4, 506)=5.342; P=0.000). There was evidence that employment status has significant relationships with individual PIT CB in the study states (ESβ= -0.314 t= -2.925, p=0.004). Hence, gender, age and educational level do not have significant relationships with individual PIT CB in the study states (GENβ=0.121, t=1.608, p=0.108, AGEβ=0.018, t=0.500, p=0.617, ELβ=0.089, t=1.758, p=0.079). The study concluded that demographic factors have significant influence on individual PIT CB in the study states. The study recommend that state governments should boost tax education, introduce taxpayment process and sound tax administration that will minimize demographic disparity and PIT non-compliance. Also, transparency and accountability should be exhibited on tax revenues to increase PIT compliance from the informal sector. Keywords: Accountability, Demographic factors, Economic performance, Personal income tax, Sustainable development, Tax authority. JEL Classification: 1. Introduction Tax is a critical pillar of Internally Generated Revenue (IGR) of the state. Taxes are mandatory or obligatory financial contributions made by taxpayers to the government from their earned incomes, profits, capital assets, properties, interest, dividends, activities or trades with no direct expected returns from the government. It is a form of payment by taxpayers to support and enhance the cost of governance (Enyi, Akintoye & Adekoya, 2019). Also, it is an instrument of public policy to stabilize the economy, redistribute wealth, finance and manage governance. Tax is a form of social contract, an instrument of revenues generation to finance government expenditures for the wellbeing of the citizens (Adekoya, 2020). Tax revenues are the lubricant for the wheel of governance, and a life blood for socio-economic and political development. Hence, tax compliance behaviour is a critical issue to governments and tax practitioners because of high rates of tax non-compliance that is common among individual taxpayers. Tax compliance is taxpayer’s deliberate behaviour of adhering to tax laws with utmost willingness to promptly pay taxes (Amaning et al., 2021). Tax compliance is an individual act which rest on honesty, accuracy, truthfulness, and timely compliant with the relevant tax laws or regulations. However, where tax compliance response is very low, it affects government’s ability to generates enough revenues to finance the provision of public goods and services, infrastructural development and enhancement of sustainable development (Radae & Sekhon, 2017). Personal Income Tax (PIT) compliance at the state level has become significant matter for state internal revenue service due to paucity of its collections. Despite the role and importance of PIT to state governments, most potential taxpayers still exhibit non-compliance attitude. Tax non-compliance is a global phenomenon in all societies and economic system, but it is more pronounced in developing countries than developed countries. It increases every year in many countries despite the critical importance of taxes to nation’s building. According to Adekoya, Enyi and Akintoye (2019), constant loss of tax revenues through individual taxpayer’s non-compliance attitude adversely affects state’s activities, sustainable development and socio-economic performance. In Nigeria, most states are faced with problems of budget deficit, heavy burden of loans debts and paucity of fund arising from low revenues from PIT non-compliance behaviour especially from the potential taxpayers in the informal sector. However, to increase tax compliance, state government should improve tax administration system and strengthen tax collection process (Appah & Duoduo, 2023). Tax non-compliance is classified into tax evasion and tax avoidance. Tax evasion is illegal dogging of tax payment while tax avoidance is by taking undue advantage of the tax laws for personal gain. mailto:sanyaaustine08@yahoo.com https://www.doi.org/10.55220/25766759.207 Asian Business Research Journal, 2024, 9: 97-104 98 © 2024 by the authors; licensee Eastern Centre of Science and Education, USA Taxpayers’ non-compliance negatively impacts tax fairness, equality, justice, and government ability to provide socio-economic goods and services. To reverse this phenomenon, it requires studies on factors that influence tax compliance. One of such is demographic factors (age, gender, education, employment status and income). However, demographic factors and PIT compliance relationship has attracted special focus and attention of governments, policy makers, academicians, and tax professionals in recent years. PIT is a form of tax chargeable on taxpayer earnings in both the formal and informal sectors. PIT is a quasi-income tax imposed on taxpayer ascertained incomes. PIT has become pertinent and importance sources of revenue for state governments. PIT collection is guided by principles of certainty, simplicity, neutrality, flexibility, effectiveness, and fairness. The tax assessment is classified into two: Pay as You Earn (PAYE) and Direct Assessment (DA). PAYE tax system is for employee in the formal sector while DA is chargeable on annual incomes of entrepreneurs or self-employed individuals in the informal sector. In most states, the highest percentage of PIT comes from PAYE while DA has minimal collection rate. Hence, Adekoya and Olayinka (2024) opined that PIT has significant influence on IGR at the state level as it contributed 61.95% maximally to the total IGR of state government in South-West, Nigeria with PAYE having 57.85% and DA 4.1%. Previous researchers have explored various approaches to enhance tax compliance among the individual taxpayers with much focus on the relationship between demographic factors and tax compliance but with less emphasis on demographic factors and PIT compliance at the states level (Afif & Setiawan, 2019; Aregbesola, Owosekun & Salawu, 2020; Daniel, Akowe & Awaje, 2016; 2020; Devos, 2008; Ekpo & Beredugo, 2023; Fischer, Wartick & Mark, 1992; Ikhsan, Restiatun & Suratman, 2023; Jackson & Milliron, 1986; Kumi et al., 2023; Muharremi et al., 2022; Oduro, Asiedu & Tackie, 2018; Otai, 2023; Paleka, Karanovic & Stambuk, 2023; Schoeman, 2023; Umoffong, Etim & Bassey, 2020). Besides, the outcomes of these past studies have shown mixed relationship. Therefore, the objective of the study is to examine the extent to which demographic factors influences PIT compliance behaviour of individual taxpayers in selected states in South-West, Nigeria. The hypothesis drafted in null forms and tested at 5% level of significance for the study is: Demographic factors, does not have significant influence on PIT compliance behaviour among individual taxpayers in the selected states in South-West, Nigeria. This hypothesis was designed to examine the influence of demographic factors on PIT compliance behaviour among individual taxpayers in the selected states in South-West, Nigeria. The empirical evidence on influence of demographic factors on PIT compliance at the state level will contribute to existing literatures on tax compliance. Furthermore, SBIRS will have knowledge of individual demographic difference on PIT compliance for better strategies on tax administration. The rest of the paper is divided into four parts, review of extant literature in part two, methodology and analysis of empirical results in part three, the fourth part deals with findings and discussion of results, while the last part focus on conclusion and recommendations. 2. Review of Extant Literature 2.1. Conceptual Review 2.1.1. Tax Compliance (TC) TC means to adhere to basic tax laws or regulations, and prompt reporting of incomes, expenses, and other financial details by taxpayer to the relevant tax authority. It is the extent to which the taxpayers fulfil their tax obligation by paying tax in line with the relevant tax laws or regulations (Adekoya et al., 2019). TC is the degree by which taxpayers complies with the relevant tax laws or regulations instituted in a country. It means prompt filling of tax returns and payment of tax to the relevant tax authority based on required tax formats. Tax compliance study in modern-day context is credited to Allingham and Sandmo (1972). They used economics of crime approach developed by Becker (1968) to explain taxpayers’ compliance and attitude. TC research involves various disciplines likes economics, psychology, political science, law, finance and accounting, and public administration. Hence, tax compliance had been defined by many researchers with focus on compliant to tax laws or regulations. According to Saw (2017), tax compliance is the prompt submission of tax returns and payment of tax liability to the tax authority. Also, Jaya (2017) defined tax compliance as taxpayers’ willingness to fulfil all tax obligations in line with the relevant tax legislation. Similarly, tax compliance is the ability to fulfil tax payment obligation as required by the relevant tax laws or regulations (Thiga & Muturi, 2015). 2.1.2. Personal Income Tax (PIT) PIT is a tax levied on individual taxpayer’s incomes. In Nigeria, PIT is regulated by Income Tax Management Act (ITMA) 1961, also known as PIT Decree (PITD) 104 of 1993. This was amended in 2004 and known as Cap P8 LFN PIT Act 2004. Furthermore, in June 2011, it was reviewed and known as PIT (Amendment Act 2011) Cap P8 LFN, this becomes operational from 14th June 2011 and was gazette on 31st January, 2012. The law gives the administrative process and power to assess and collect taxes from individuals, executors, trustees, and partners resident in the state. It is a form of tax revenue collected by state governments through the SBIRS from individual taxpayers’ resident in the state while other individual taxpayers like members of Nigeria Polices, Armed forces, External Affairs, federal capital territory residents, and Non-residents pay PIT through federal inland revenue service to the federal government. PIT is levied on individual personal incomes likes wages and salaries, dividends, director fees, royalties, income generating activities, and rental incomes. It is based on residency rules, and payable by individual employees or workers in the formal sector, and self-employed or entrepreneur in the informal sector. Employees pay PIT through PAYE system; this involves withholding method or by monthly deduction at source from workers’ salaries and wages by employer and remitted to the relevant tax authority. PIT is a form of progressive taxation, the higher the wages and salaries, the higher PIT and vice versa. Alternatively, DA is assessed and chargeable on self-employed or entrepreneur in the informal sector but its collection is characterized with problems likes corruption, incomplete records keeping, ineffective monitoring, and high rate of tax non- compliance. 2.1.3. Taxpayers’ Demographic Factors Demographic factors also known as socio-economic factors is used to define population. The demographic factors in Fischer et al., (1992) model of tax compliance includes gender, age, educational level, income level, religious and employment status. But the study only considers four of these factors. These are gender, age, educational level, and employment status. Asian Business Research Journal, 2024, 9: 97-104 99 © 2024 by the authors; licensee Eastern Centre of Science and Education, USA Gender: Gender is a psychological factor which influence taxpayers’ attitude on either to pay or not to pay tax. It is the value and behavioral differences between males and females. Previous studies on gender behaviour on risk and ethical attitude has shown divergence outcome in male and female behaviour. Some of the outcomes revealed that males engaged more on unethical behaviour and take risk than females, while females are risk adverse, honest, obedient and avoid long term risk in decision making (Abung & Damayanti, 2023; Bernasek & Shwift, 2001; Dewanta & Machmuddah, 2019; Kastlunger et al., 2010; Muharremi et al., 2022; Syarbin, Restiatiun & Suratman, 2023). Hence, females are reported to be motivated to pay tax, tax compliant and obedient to tax laws than males (Aladejobi, 2019; D’Attoma, Volintiru & Steino, 2017). However, Afif and Setiawan (2019); Ekpo and Beredugo (2023) reported that gender has no effect on taxpayer’s tax compliance behaviour. Furthermore, the basic reason for behavioral differences between the male and female individual is the various factors highlighted in the biological and socio-psychological theories. The biological theorist sees the sex hormone and gene differences as factor responsible for risk behaviour between the males and females. The social psychological theorist attributes the sex specific role in terms of level of socialization to gender differences in behaviour. These behavioral characteristics have impact on the tax compliance behaviour of males and females on either to pay or not to pay tax (Alabede, 2014; Meier-Pesti & Penz, 2008). Age: The age bracket of the citizen is also a factor to tax compliance. According to Tittle (1980), young individuals are risk takers, crime prone and less sensitive to sanction and punishments while the older individuals are risk averse, have more wisdom, experience and knowledge. This clarification means that the young individuals are likely to be tax non-compliance than the older tax payers. However, findings from previous research showed a mixed reaction on the influence of age on tax compliance behaviour. Kumi et al., (2023); Paleka et al., (2023) reported that a significant relationship exists between age and tax compliance while Afif and Setiawan (2019); Ekpo and Beredugo (2023); Nugroho and Sulistyawati (2019) concluded that age has no significant effect on tax compliance. Educational level: Education level is another factor that influences tax payers’ compliance behaviour. Education can be classified into two: formal education in terms of secondary and tertiary qualifications, and tax knowledge or the ability to comprehend tax laws for complaints. Tax laws are complex; full of technical jargons and abstract in nature; therefore, better understanding of the laws will enhance positive tax compliance (Alabede, 2014). Tax payer’s educational level is all about knowledge on: tax process; the basic reason for tax payment; and the importance or role of tax to the government. According to Jackson and Milliron (1986), tax education means taxpayer’s knowledge on either to comply or not to comply with the relevant tax laws. Kumi et al., (2023); Le et al., (2020); Vincent, Stevenson, and Owolabi (2023); Amaning et al., (2021) reported that a positive relationship exists between education level and tax compliance. Hence, tax compliance increases with educational attainment and positive tax compliance behaviour while lack of tax education or adequate knowledge of the tax laws might probably lead to taxpayers’ non-compliance. Employment status: The value of tax from individual taxpayer depends on their incomes. Therefore, taxable income is a function of employment status of in the formal or informal sectors. Besides, tax evasion in the formal sector is minimized as tax income is deducted at source through PAYE system and remitted to the appropriate tax authority. Alternatively, tax incomes from the informal sector are more prone to tax non-compliance. Previous studies by Adekoya (2020); Adekoya and Enyi (2019); Adekoya et al., (2019) revealed that employment status shows significant relationship with individual voluntary tax compliance behaviour. 2.2. Theoretical Framework The study anchors on two theories: Fischer model and Theory of planned behaviour. 2.2.1. Fischer Model Fischer tax compliance model was developed by Fischer et al., (1992) to explain the importance of demographic variables in tax compliance. This premise on the fact that taxpayers’ compliance rate depends on demographic factors to comply or not to comply. The model concluded that demographic factors influence tax compliance. 2.2.2. Theory of Planned Behaviour (TPB) TPB was propounded by Ajzen in 1991 and it centers on attitude and beliefs of an individual. TPB evolved from the theory of reason action where intention is the best prediction of attitude and beliefs (Ajzen, 1991; Fishbein & Ajzen, 1975). Hence, intention is the combination of attitudes and beliefs while behaviour is how intention is converted into action. TPB is anchors on three factors of beliefs, these are behavioral beliefs, control beliefs, and normative beliefs (Fishbein & Ajzen, 2010). Behavioral beliefs arises from individual beliefs that is based on behaviour and result evaluations. Control beliefs is the belief of inhabit behaviour or action that will be displayed. Normative beliefs mean normative expectation and the morality or motivation for meeting those expectations. The TPB is relevant to explain the behaviour of taxpayers in fulfilling their tax obligations. Taxpayer’s gender, age, marital status and level of education or tax knowledge will propel tax payment (behavioral belief) while the control beliefs anchor on tax audit and penalties designed to enforce taxpayers’ compliance with tax rules and further tax payment. The normative expectation or belief rest on the expected satisfaction from tax payment (social contract), efficient and effective tax system, equality and fairness, and accountability which motivates tax payers to oblige and obey tax laws. 2.3. Empirical Review San et al., (2024) looked at the influence of SMEs demographic profile on tax compliance behaviour in Malaysia. The study revealed that gender and age disparities influenced SMEs tax compliance while level of education contribute to higher tax compliance. Besides, Schoeman (2023) studied the impact of demographic variables on Value Added Tax compliance in South Africa. The study revealed that before changes in VAT rates, education, gender and tax knowledge have influence on tax compliance decision. Hence, after the change in the VAT rate, education is the only demographic factors that has significant effect on tax compliance. Similarly, Ikhsan et al., (2023) studied demographic characteristics and tax compliance. The study revealed that age has effect on tax compliance while gender has no effect on tax compliance. Also, Umoffong et al., (2020) examined demographic and socio-economic factors as determinants of tax compliance in self-assessment system in Akwa-Ibom state, Nigeria. Asian Business Research Journal, 2024, 9: 97-104 100 © 2024 by the authors; licensee Eastern Centre of Science and Education, USA The study revealed that level of education has significant positive influence on tax compliance. Furthermore, Muharremi et al., (2022) studied the influence of demographic factors on Albanian individual taxpayer’s ethical beliefs surrounding tax compliance. The study revealed that gender, marital status, level of education impact tax compliance. Moreover, Defitri and Fauziati (2018) looked at the effect of demographic factors and E-filling usage on tax compliance. The studied revealed that demographic factors like age and education have no effect on tax compliance. Twesige et al., (2024) studied gender and the tax compliance puzzle on whether or not gender influence taxpayers’ behaviour towards tax compliance in Rwanda. The studied revealed that gender contributes to taxpayers’ behaviour towards tax compliance. Besides, Kumi et al., (2023) examined voluntary and enforced tax compliance determinants and its impact among Agrochemical business in Ghana. The study revealed that age and gender positively influence enforced tax compliance while education level has positive impact on voluntary tax compliance and negative impact on enforced tax compliance. In addition, Otai (2023) looked at gender and tax compliance of small and medium enterprises in Nigeria. The study revealed that gender has insignificant relationship with tax compliance. Moreover, Kaghazloo and Borrego (2022) studied the model affecting tax professional tax non-compliance behaviour. The study revealed that age and gender were the most importance factors that influence tax professional tax non-compliant behaviour. In addition, Otai, Ndede and Fredrick (2023) studied the effect of age and level of income-on-income tax compliance of small and medium enterprises in Soroti district, Uganda. The study revealed that owners’ managers age has significant relationship with income tax compliance by firms. Similarly, Deyganto (2018) looked at the various factors that influence taxpayers voluntary tax compliance in Gedeo zone of Southern Ethiopia. The study revealed that gender and age are key factors that influence taxpayers’ voluntary compliance attitude while education level has no significant influence on tax compliance attitude. Geyik, Seren and Mcgee (2024) investigated the empirical analysis on the effect of taxpayers’ education level and marital status factors on taxpayers’ attitude and behaviour towards taxes. The study revealed that marital status is a significant demographic variable that influence attitude and behavior towards taxes while educational level shows differences towards taxes. Similarly, Karlina and Anggraini (2024) examined the influence of educational level, tax understanding and tax awareness on individual taxpayer compliance. The study revealed that level of education, tax understanding and perceived tax awareness simultaneously have significant and positive effect on individual taxpayer compliance. Besides, Helmy, Dwita and Cheisviyanny (2020) looked at the influence of gender and Machiavellianism on tax evasion. The study revealed that gender has significant influences on tax evasion among accounting students where men demonstrate high level of tax evasion than women. Moreover, Aregbesola et al., (2020) looked at marital status and educational background as determinants of tax compliance in Nigeria. The study revealed that marital status significantly influences personal income tax compliance while educational level insignificantly influences personal income tax. Furthermore, Tan et al., (2021) investigated the moderating effect of individual taxpayer’s education level on ethical perception and tax compliance behaviour in peninsular, Malaysia. The study revealed a positive significant relationship between ethical perception and tax compliance behaviour through educational level which enhances greater tax compliance. Additionally, Kurnia and Fajarwati (2022) examined the effect of educational level, income level and tax policy on taxpayer compliance during the Covid-19 pandemic. The study revealed that education level partially had negative effect or did not affect taxpayer compliance. Lastly, Oduro et al., (2018) studied tax evasion determinants in developing economies using structural equations model in Ghana. The study revealed that socio-cultural factors such as age, gender, income level and education level does not have significant influence on tax evasion. 3. Methodology The study employed survey research design and random sampling techniques to gathered the relevant primary data required for the study from individual tax payers in both formal and informal sectors in the three selected states of Lagos, Oyo, and Ogun in the South West, Nigeria. The survey design was adapted for the study because of its reliability to gather data from individual tax payer on tax compliance as affirmed by previous researchers like Adekoya (2020); Adekoya and Enyi (2020) Alabede (2014), Al-Maghrebi et al., (2016), Kirchler and Wahl (2010), Sitardja and Dwimulyani (2016). Six hundred copies of questionnaires were administered to various individual respondents in the three states at two hundred copies each. A total of five hundred and six copies were received, this gives a response rate of 84.3%. The PIT compliance questions highlighted in the questionnaire were adapted from the work of tax payers’ compliance appraisal by Fischer et al., (1992), Adekoya (2020); Adekoya and Akintoye (2019); Enyi, Akintoye and Adekoya (2019); Kirchler and Wahls (2010), Lateef, Saheed and Onipe (2015). The PIT questions covered morality, honesty and trust, responsibility, and right of payment. These questions were structured, scaled in closed ended form, and were measured using six-point Likert scale of 1=strongly disagree, 2=disagree, 3=partially disagree, 4=partially agree, 5=Agree and 6=strongly agree. 3.1. Reliability of Research Instrument The reliability of the research instrument was measured with the use of composite reliability test. A composite reliability and Cronbach Alpha (α) calculated greater than 0.6 was affirmed by Taber (2016); Adekoya (2020); Adekoya, Adegbie and Agbetunde (2020); Adekoya, Agbetunde and Lawal (2022) as a reasonable, reliable and acceptable. The reliability test of the instrument based on pilot study showed that PIT compliance had Cronbach’s alpha of 0.81. This showed that the instrument was reasonable and reliable for the study. 3.2. Model Specification The study expects that the independent variables (demographic factors) would enhance dependent variable (PIT compliance). It is therefore expected that demographic factors would enhance PIT compliance. Demographic factors are gender, age, education level, and employment status. 3.2.1. PIT Compliance and Demographic Factors PITC = β0 + β1GENi + β2AGEi + β3ELi + β4ESi + ε Where: Asian Business Research Journal, 2024, 9: 97-104 101 © 2024 by the authors; licensee Eastern Centre of Science and Education, USA GEN = Gender AGE = Age EL = Education level ES = Employment status Ɛ = Error terms β0 = Intercept or the constant β1 – β4 = Partial regression coefficient of the explanatory variables. 4. Results and Findings Data collected from the sampled questionnaires were analyzed and interpreted with descriptive statistics of simple percentage, mean, and frequency while the hypothesis was tested with inferential statistics of Ordinary Linear Square (OLS) regression and Analysis of Variance (ANOVA). 4.1. Demographic Characteristics of the Respondents This section describes the demographic features of the respondents and this centers on gender classification, age distribution, educational qualification level, and employment status. Table 1. Demographic statistics of respondents. Respondents characteristics Frequency Cumulative frequency Percentage (%) Cumulative percentage (%) Gender: Male 314 314 62.1 62.1 Female 192 506 37.9 100 Age: 18-30 Years 103 103 20.4 20.4 31-40 Years 168 271 33.2 53.6 41-50 Years 153 424 30.2 83.8 51-60 Years 77 501 15.2 99.0 61 Years and above 5 506 1.0 100 Educational qualification: GCE/WASC and below 37 37 7.3 7.3 OND/NCE 96 133 19.0 26.3 HND/BSc 289 422 57.1 83.4 MSc/MBA 77 499 15.2 98.6 PhD 7 506 1.4 100 Employment status: Informal employment 85 85 16.8 16.8 Formal 421 506 83.2 100 The demographic statistics of the respondents in assessing the influence of demographic factors on taxpayers’ PIT compliance behaviour in selected states in South-West, Nigeria, in Table 1 shows that more male respondents 62.1% were involved. Also, those in their active age of tax payment 99% responded to the test items. The result showed that 92.7% of respondents were knowledgeable to respond to the test items with their basic educational qualification above WASC/GCE. On the employment status, the study revealed that majority of the respondents 83.2% were from the formal sectors. 4.2. Descriptive Analysis of the Test Items This section describes the test items with measure of attitudes and morality, honesty and trust responsibility, prompt payment, and perception using six (6) Likert scale. Table 2. Respondent responses on PIT compliance. SD D PD PA A SA Mean Paying tax is the right and natural things to do. 2.0% 2.6% 3.6% 10.5% 29.6% 51.8% 5 Paying tax is a responsibility that should be willingly accepted by all citizen. 0.4% 1.6% 3.0% 11.3% 32.6% 51.2% 5 I pay tax to support the state, other citizen and its programme. 0.0% 1.8% 3.4% 11.1% 40.1% 43.7% 5 I will pay tax even when there are no controls because I am sure am doing the right things. 3.0% 4.7% 4.9% 20.6% 32.8% 34.0% 5 Paying tax promptly is a matter of cause because I like to contribute to everyone’s goods. 0.2% 4.7% 3.4% 21.1% 37.9% 32.6% 5 I feel morally obliged to honestly declare all my income for tax purposes because I regard it as my duty. 2.0% 4.2% 6.3% 23.7% 39.1% 24.7% 5 I will pay tax even if tax audit does not exist. 5.1% 12.3% 9.3% 26.5% 27.5% 19.4% 4 Overall mean 4.84 In Table 2, the mean of 5 each indicates that majority of the respondents agreed: that paying tax is the right and natural things to do; that paying tax is a responsibility that should be willingly accepted by all citizens; that they will pay tax to support the state, other citizens and its programme; that they will pay tax even when there are no controls because they are sure that they are doing the right things; that paying tax promptly is a matter of cause because they like to contribute to everyone’s goods; that they feel morally obliged to honestly declare all their Asian Business Research Journal, 2024, 9: 97-104 102 © 2024 by the authors; licensee Eastern Centre of Science and Education, USA incomes for tax purposes because they regard it as their duty. In addition, the mean of 4 further suggests that the respondents agreed that they will pay tax even if tax audit does not exist. On the overall, a mean of 4.84 further indicates that majority of the respondents agreed that PIT compliance is necessary in their respective state. 4.3. Test of Hypothesis Table 3. Demographic factors and PIT compliance. Coefficientsa Model Unstandardized coefficients Standardized coefficients t Sig. B Std. error Beta 1 (Constant) 4.785 0.258 18.563 0.000 Gender of the respondents 0.121 0.075 0.072 1.608 0.108 Age of the respondent 0.018 0.037 0.023 0.500 0.617 Educational Level/Qualification of respondents 0.089 0.051 0.089 1.758 0.079 Employment status of respondents -0.314 0.107 -0.143 -2.925 0.004 Model summary Model R R square Adjusted R square Std. error of the estimate 1 0.202a 0.041 0.033 0.80604 Anovaa Model Sum of squares Df Mean square F Sig. 1 Regression 13.882 4 3.470 5.342 0.000b Residual 325.502 502 0.650 Total 339.383 506 Note: a. Dependent variable: PITC b. Predictors: (Constant), employment status of respondents, age of the respondent, gender of the respondents, educational qualification of respondents. Source: Researcher’s work (2024) @Chosen Significant level of 5% Regression output = 4.785 + 0.121GEN + 0.018AGE + 0.089EL – 0.314ES + Ɛ 4.4. Interpretation The regression estimates on Table 3 shows that proxies of our exogenous have both positive and negative effect on PIT compliance. This is indicated by the signs of the coefficients, which are > &<0. Some of these results are consistent with the a-priori expectation for this study. The results of regression analysis for the influence of demographic factors on PIT compliance behaviour of the selected states in South-West, Nigeria shows that gender (0.121), age (0.018), and educational level (0.089) have positive relationships with individual PIT compliance behaviour in the study states, while employment status (-0.314) has negative relationships with individual PIT compliance behaviour in the study states. The study revealed that demographic factors positively influenced individual PIT compliance in the study states (Adj R2=0.033, F(4, 506) =5.342; P=0.000. The adjusted R-square of the model showed 3.3%, this suggest that variation in PIT compliance of the sampled population can be attributed to all our independent variables put together, while the remaining 96.7% variations in PIT compliance are caused by other factors not included in this model. There was evidence that employment status has significant relationships with individual PIT compliance behaviour in the study states (ES β= -0.314 t= -2.925, p=0.004). However, gender, age and educational level do not have significant relationships with individual PIT compliance behaviour in the study states (GEN β=0.121, t=1.608, p=0.108, AGE β=0.018, t=0.500, p=0.617, EL β= 0.089, t=1.758, p=0.079). This implies that employment status are significant factors that influenced changes in the individual PIT compliance behaviour in the study states while gender, age and educational level of the respondents were not significant factors that influenced changes in individual PIT compliance behaviour in the study states. The F-statistic of 5.342 is statistically significant with p=0.000. This indicated that on the overall, the statistical significance of the model showed that the null hypothesis that demographic factors does not have significant influence on individual PIT compliance behaviour in the selected states in South-West, Nigeria was rejected. Hence, the alternative hypothesis that demographic factors have significant influence on individual PIT compliance behaviour in the selected states in South-West was accepted at 5 percent level of significance. Therefore, the model is statistically significant. 4.5. Discussion and Implication of Findings The descriptive statistic revealed that majority of the respondents agreed that paying tax is a right, natural and responsibility that should be willingly be done by individual taxpayer. In addition, respondents feel morally obliged and honest to declared their income for tax purposes. Hence, majority agreed that PIT compliance is necessary and should be embraced. Empirical findings from the test of hypothesis on the demographic factors and PIT compliance behaviour in the study states revealed that age, gender, and educational level have positive relationships with individual PIT compliance behaviour while employment status has negative relationships with individual PIT compliance behaviour in the study states. This implies that employment status are significant factors that influenced changes in the individual PIT compliance behaviour in the study states. This aligns with the study of Adekoya (2020); Adekoya and Enyi (2019); Adekoya et al., (2019). Conversely, gender, age and educational level of the respondents were not significant factors that influenced changes in individual PIT compliance behaviour in the study states. In respect of gender, the outcome aligns with the studies of Afif and Setiawan (2019); Ekpo and Beredugo (2023); Otai (2023) and negate the study of Deyganto (2018); Muharremi et al., (2022); Twesige et al., (2024), that gender influences taxpayer compliance. The age variable outcome aligns with the study of Afif and Setiawan (2019); Ekpo and Beredugo (2023) but negate the outcome of Kumi et al., (2023); Ikhsan et al., (2023); Otai et al., (2023); Paleka et al., (2023) of a significant relationship between age and tax compliance. Also, education level outcome aligns with Amaning et al., (2021); Aregbesola et al., (2020); Deyganto (2018); Kumi et al., (2023); Vincent et al., (2023) of positive relationship and of no significant influence on tax compliance, and negate the studies of Asian Business Research Journal, 2024, 9: 97-104 103 © 2024 by the authors; licensee Eastern Centre of Science and Education, USA Karlina and Anggraini (2024); Muharremi et al., (2022); Umoffong et al., (2020) of significant influence on tax compliance. The F-statistic of 5.342 is statistically significant at p=0.000. Therefore, the study revealed that demographic factors have significant influence on individual PIT compliance behaviour in the selected states of South-West, Nigeria at 5 percent level of significance. 5. Summary, Conclusion and Recommendation of Findings 5.1. Summary of Finding On demographic factors, the study revealed that gender, age, and educational level have positive relationships with individual PIT compliance behaviour while employment status has negative relationships with individual PIT compliance behaviour in the study states. The findings also revealed that employment status has significant relationship with individual PIT compliance behaviour while gender, age and educational level do not have significant relationship with individual PIT compliance behaviour. Meanwhile, employment status are significant factors which influenced changes in the individual PIT compliance behaviour while age, gender and educational level of the respondents were not significant factors which influenced changes in individual PIT compliance behaviour. The study concluded that demographic factors have significant influence on individual PIT compliance behaviour in selected state of South-West, Nigeria. 5.2. Recommendations The process of increasing PIT collection at the state level is of utmost importance with focus on individual demographic bracket. Therefore, state government should increase the level of tax education among the citizens to boost PIT compliance. Also, school curriculum should be explored to include tax education to enrich tax knowledge from the youthful age. The age bracket of taxpayer should be analyzed to set strategies on how to ensure compliance for those taxpayers that are usually not tax compliant. Government should introduce friendly tax payment mechanism that will minimize gender disparity to ease tax compliant. Transparency, fairness and accountability on tax revenues should be exhibited by government to encourage taxpayers in the informal sector to willingly comply to tax payment. 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