Tax audit and Tax Compliance, the role of tax education and Fear Appealing Messages

The study explores the role of tax education and fear-appealing messages

in the linkage between tax audit and tax compliance among corporate

entities. Data was collected from 205 corporate entities using questionnaire

as an instrument. The data was analysed using the PLS-SEM. It was

observed that tax audit enhances tax compliance among corporate entities.

Again, while tax education partially mediates the linkage between tax

audit and tax compliance, fear-appealing messages negatively moderate

the relationship between the two. The study concluded that regular tax

education during tax audits enhances tax compliance but does not release

threatening messages to taxpayers. It was recommended that tax revenue

authorities should increase tax audit frequency and educate tax payers

during the audit exercise. This has the tendency to improve the level of tax

compliance among corporate entities.