Effect of Tax Fraud on Underdevelopment of Rural Communities in Bayelsa State

Adesuwa R. Edoumiekumo PhD

doi:10.56201/wjfir.v10.no7.2026.pg34.49

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Effect of Tax Fraud on Underdevelopment of Rural Communities in Bayelsa State

Adesuwa R. Edoumiekumo PhD

Abstract

This study investigates the effect of tax evasion on the underdevelopment of Bayelsa state, Nigeria. In particular, it examines the correlation between three tax frauds namely non-reporting of income, false deductions and exemptions, and failure to remit collected taxes and the challenges of development in the rural areas of the state. The study employs descriptive research design using primary data gathered from the employees of the Revenue and Public Accounts Departments of eight local government secretariats of Bayelsa State, the correlation analysis is used to establish the relationship between tax fraud and underdevelopment. The results exhibit statistically significant positive correlation between all three types of tax evasion and rural underdevelopment; the correlation between income underreporting and rural underdevelopment is moderate (r = 0.580), and both false deductions/exemptions and non-remittance of collected tax has a strong correlation (r = 0.735). The results indicate that tax evasion is a direct cause of the lack of financial resources for rural development, which further compounds the infrastructure gaps, limited access to health care and poor education services in rural areas. The study suggests tax policy changes: enhance tax administration, improve tax enforcement, boost awareness and introduce more tax revenue for rural development projects.

Keywords

Tax FraudRural UnderdevelopmentUnderreporting IncomeFalse DeductionsNon-Remittance of TaxesBayelsa StateNigeriaTax ComplianceRevenue GenerationRural Development

References

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Effect of Tax Fraud on Underdevelopment of Rural Communities in Bayelsa State

Abstract

Keywords

References

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