Effects of Tax Evasion and Tax Avoidance on Revenue Generation in Anambra State, Nigeria

This study investigated the effects of tax evasion and tax avoidance on revenue generation in Anambra State, Nigeria from 2019-2025. The motivation stems from consistent shortfall in Internally Generated Revenue (IGR) targets despite reforms by Anambra State Internal Revenue Service (AiRS) and introduction of ANSSID. Specific objectives were to: (i) identify causes of tax evasion and avoidance in Anambra State, (ii) examine the effect on IGR, (iii) examine relationship between enforcement and compliance. Survey research design was used. Population was 580 comprising 80 AiRS staff and 500 SMEs in Idemili North and Onitsha North. Sample size of 120 was determined using Taro Yamane formula. Primary data via structured questionnaire (Cronbach Alpha 0.84). Data analyzed using descriptive statistics, Pearson correlation and multiple regression with SPSS 26.0. Findings: high tax burden (Mean=4.21), lack of tax education (Mean=4.05), distrust in government (Mean=4.18) and weak enforcement (Mean=3.95) are major drivers. Regression shows tax evasion β=-0.624 p<0.05 and tax avoidance β=-0.513 p<0.05 jointly explain 68.2% variation in IGR (R2=0.682). The study concludes that evasion and avoidance have significant negative effect on revenue generation. Recommendations include grassroots Igbo-language tax education, simplification of presumptive tax for informal sector, deployment of technology, and fiscal accountability.