Do Audit Committee Independence and Activity Level Influence Corporate Tax Compliance? Evidence from Listed Manufacturing Companies in Nigeria

Abstract

This paper examined the influence of audit committee independence and activity level on tax compliance by 29 manufacturing companies in Nigeria. Data were extracted from the annual reports and accounts of the sampled companies during the period 2009 to 2018. Descriptive statistics and pooled OLS regression analysis were adopted in the data analysis. The results of the data analysis indicated that audit committee independence has no significant influence on tax compliance while audit committee activity level has a significant influence. The paper recommended, among others, that the relevant authorities should review the provisions of the Companies and Allied Matters Act and Code of Corporate Governance for a higher percentage of non-executive directors on the audit committee. The paper essentially contributes to the literature showing the effect of corporate governance mechanisms on corporate tax compliance and offers useful insights towards reforms for greater tax compliance by companies in Nigeria.