Effects of Tax Audit on Government Revenue Generation in Southwest, Nigeria

Taxation is a fundamental pillar of government finance, crucial for funding public services and infrastructure. Tax audits represent a critical mechanism for ensuring compliance and optimizing revenue collection for governments globally This study explores the broader implications of tax audits on government revenue generation, focusing on the Southwest region of Nigeria. The overarching objective of this study is to examine the impact of tax audits on government revenue generation in Southwest, Nigeria. The Specific Objectives is to assess the effectiveness of tax audits in improving compliance and revenue collection, to analyze the relationship between tax audit outcomes and revenue performance over time, to identify challenges and opportunities for enhancing the efficiency and effectiveness of tax audits in Southwest, Nigeria. Data for this study were sourced from both primary and secondary sources. Primary data were gathered through structured interviews with tax officials and taxpayers, the estimation technique employed includes regression analysis to explore the relationship between audit variables and revenue outcomes. The study reveals that robust tax audit practices significantly contribute to increased government revenue in Southwest, Nigeria. Enhanced audit frequency and quality are correlated with improved compliance levels and subsequent revenue gains. However, challenges such as resource constraints and administrative bottlenecks remain obstacles to maximizing audit effectiveness, In conclusion, the study further concluded that Computer Aided Audit Tools have a significant impact on government revenue generation in Southwest, Nigeria and that it will help reduce tax avoidance and evasion, Enlightenment of general public will help them know more about tax and tax audit and that illiteracy have impact on tax compliance in Nigeria and it was significant. Recommendations are provided for the revenue authority should provide a database for all taxable people in the country because non-availability of the database of all taxable individuals by the revenue authority provides an opportunity for ineffective tax audit. Tax policies should be reviewed and updated constantly for an effective tax audit system