AI-Powered Tax Monitoring Systems: A Solution to Curb Tax Evasion and Improve Compliance in Nigeria

Abstract

The need to improve tax collection and gain more revenue for the Nigerian government has been over-emphasized in extant literature. It has become even more critical with the dwindling oil revenues. Hence, using artificial intelligence (AI) to reduce tax evasion and improve tax compliance has become necessary for Nigerian public finance. This study used both secondary and primary data obtained through a structured questionnaire. It was distributed to 130 respondents to capture expert opinions on the relevance of AI-powered tax monitoring systems to curbing tax evasion. Descriptive analyses, paired t-tests, and ANOVA were employed for data analyses, and findings indicate a significant case of tax evasion. The study provided insight into how AI-powered tax monitoring systems can reduce tax evasion and elicit reasonable tax compliance. However, there were significant differences in the results obtained across groups. Therefore, the study concluded that policymakers in Nigeria should carefully consider adopting AI-powered tax monitoring systems as a panacea to the growing underground economy and tax evasion in the country. The study also recommended that the difficulties of AI-powered tax monitoring systems, such as cost, technical expertise, and adequate infrastructure, should be carefully considered before implementation to avoid policy summersault