Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between presumptive tax assessment and tax compliance level has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of Selected States in Northern Nigeria where operating conditions differ markedly from more developed markets.

Within the context of Selected States in Northern Nigeria, this relationship carries particular significance. Organizations in this setting operate under a distinct combination of economic, regulatory, and market conditions that may amplify or dampen the effect of presumptive tax assessment on tax compliance level, making a context-specific inquiry both timely and necessary.

1.2 Statement of the Problem

Despite a growing body of literature on presumptive tax assessment, there remains limited consensus on the precise nature of its relationship with tax compliance level, particularly within Selected States in Northern Nigeria. Many organizations continue to make decisions about presumptive tax assessment without a clear, evidence-based understanding of how those decisions ultimately affect tax compliance level. This gap between practice and empirical understanding is the central problem this study seeks to address.

1.3 Objectives of the Study

1. To examine the effect of Presumptive Tax Assessment on tax compliance level in Selected States in Northern Nigeria.
2. To assess the extent to which presumptive tax assessment influences tax compliance level within the study area.
3. To identify the challenges associated with presumptive tax assessment in relation to tax compliance level.
4. To recommend strategies for optimizing presumptive tax assessment in order to improve tax compliance level.

1.4 Research Questions

1. What is the effect of presumptive tax assessment on tax compliance level in Selected States in Northern Nigeria?
2. To what extent does presumptive tax assessment influence tax compliance level within the study area?
3. What challenges are associated with presumptive tax assessment in relation to tax compliance level?
4. What strategies can be adopted to optimize presumptive tax assessment in order to improve tax compliance level?

1.5 Significance of the Study

This study is significant to a range of stakeholders. For policymakers and regulators, the findings offer evidence to guide the design of frameworks that support healthier outcomes around tax compliance level. For managers and practitioners within Selected States in Northern Nigeria, the study provides practical insight into how presumptive tax assessment can be better managed. Finally, it contributes to the academic literature on taxation by extending existing knowledge into a specific empirical context, and offers a reference point for future researchers.

1.6 Scope of the Study

In terms of scope, this study confines itself to Selected States in Northern Nigeria, focusing specifically on how presumptive tax assessment relates to tax compliance level within that setting. Findings are interpreted within these boundaries rather than as universal claims applicable to every organization or market.