The Impact of Tax Audit on Small Scale Industry in Kano (a Case Study of Kwari Market, Kano)

ABSTRACT The aims of this research is to examine the assess the impact of tax audit on Small Scale Industry in Kano State. Other objectives are;assess the relationship between back duties Audit among SMEs in Kano, assess the impact of desk audit amongst the SMEs in Kano State anddetermine the impact of field audit amongst the SMEs in Kano State. The study shows a significant relationship between back duty and small scale business. This was ascertained when hypothesis one was tested using the Pearson’s correlation analysis which showed a positively correlated significant relationship between back duty and small scale business, meaning that the null hypothesis was rejected while the alternate hypothesis was accepted. The study also shows a significant relationship between Field tax audit and small scale business. This was ascertained when hypothesis two was tested using the Pearson’s correlation analysis which showed a positively correlated significant relationship between Field tax audit and Small scale business, meaning that the null hypothesis was rejected while the alternate hypothesis was accepted. It implies that there is relationship between field tax audit and small scale business of Kwari market.It is concluded that, both three proxies of tax audit (field audit, back duty and desk audit) have strong relationship with small scale business of the above business in Nigeria. Tax audit help in to ensure some level of compliance with tax laws, rules and regulations as well as performing the administrative checks on returns submitted. Based on the findings of study the following recommendations are made;The tax authorities should not concentrate only on desk tax audit but also on field tax audit so that revenue leakages will be blocked and increase the level of tax payers’ compliance, There should be regular tax audit practices by tax authorities in Nigeria.