Chapter One — 1.1 Background to the Study

Presumptive Tax Assessment has increasingly attracted the attention of researchers, regulators, and practitioners concerned with voluntary tax compliance. This growing interest reflects the recognition that presumptive tax assessment does not operate in isolation, but interacts with a wider set of institutional and market conditions found within Lagos State.

Lagos State presents a useful setting for examining this relationship precisely because the conditions there — structural, regulatory, and behavioural — differ from those typically assumed in the broader literature, most of which draws on evidence from more developed economies.

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 voluntary tax compliance, particularly within Lagos State. Many organizations continue to make decisions about presumptive tax assessment without a clear, evidence-based understanding of how those decisions ultimately affect voluntary tax compliance. 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 voluntary tax compliance in Lagos State.
2. To assess the extent to which presumptive tax assessment influences voluntary tax compliance within the study area.
3. To identify the challenges associated with presumptive tax assessment in relation to voluntary tax compliance.
4. To recommend strategies for optimizing presumptive tax assessment in order to improve voluntary tax compliance.

1.4 Research Questions

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

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 voluntary tax compliance. For managers and practitioners within Lagos State, 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 Lagos State, focusing specifically on how presumptive tax assessment relates to voluntary tax compliance within that setting. Findings are interpreted within these boundaries rather than as universal claims applicable to every organization or market.