TAX CONSULTANTS, COMPLIANCE, AND ADMINISTRATIVE EFFICIENCY: EVIDENCE FROM LAGOS STATE INTERNAL REVENUE SERVICE

Abstract

The ability of sub-national governments to fund public infrastructure and social welfare is fundamentally linked to their internal revenue generation capacity. In the context of Nigeria’s fiscal landscape, the Lagos State Internal Revenue Service (LIRS) faces the dual challenge of meeting ambitious revenue targets while navigating an increasingly complex tax environment. This study investigates the impact of tax consultants on revenue generation within Lagos State, focusing on their influence on tax compliance and administrative efficiency. Utilizing a mixed-methods research design, the study collected data from 234 LIRS staff members and 50 registered tax consultants, supplemented by an analysis of financial trends from 2015 to 2024. Statistical analysis, including multiple regression and correlation models, reveals a strong positive relationship between the presence of tax consultants and levels of voluntary tax compliance. However, the study identifies a significant performance gap regarding administrative efficiency; their involvement has a marginal, statistically insignificant impact on streamlining internal assessment processes and reducing audit timelines at the LIRS. These findings highlight a behavioral-operational dichotomy: consultants act as effective conduits for compliance but face structural resistance within existing administrative workflows. The research concludes that the LIRS must move toward a collaborative regulatory framework to bridge this gap. Key recommendations include the deployment of a centralized digital portal for consultant-authority interaction, and the adoption of alternative dispute resolution mechanisms to optimize audit efficiency. This study contributes to the literature on public finance and third-party intermediation in developing economies, offering a blueprint for enhancing fiscal autonomy in sub-national governance.