Transfer Pricing Regulation: A Pre-Post assessment of Tax Revenue Generation in Federal Inland Revenue Service, Nigeria

The financial link between States and their citizens is established by taxation, making tax revenue the core of any country's revenue base. However, multinational companies' habitual questionable profit-shifting practices have become commonplace and this resulted in the enforcement of transfer pricing regulation to curb the menace. Hence, the study investigates tax revenue generation pre and post transfer pricing regulations in Nigeria. This study adopted a cross-sectional survey research design, and the population was 749 staff of Federal Inland Revenue Service (FIRS), Nigeria. All the 575 staff of FIRS in Lagos State were used as the unit of analysis hence the adoption of total enumeration method. A validated questionnaire was used to collect data. The Cronbach’s alpha reliability coefficients for the constructs ranged from 0.65 to 0.95. A response rate of 85.7% was achieved for the study. Data were analyzed using descriptive statistics. Findings revealed that the level of tax profit pre-reform was low given the mean value of 2.05. In addition, tax revenue generation was high post TPRs implementation. This study concluded that TPRs is critical for generating tax revenue growth in Nigeria. The study recommended that management of FIRS to re-energize their commitment to transfer pricing regulations implementation, compliance, and audit and deploy appropriate strategy that would benefit the agency’s capacity to improve revenue collection.