AN EXAMINATION OF ADMINISTRATIVE PRODUCTS UNDER THE PETROLEUM

AN EXAMINATION OF ADMINISTRATIVE PRODUCTS UNDER THE PETROLEUM PROFIT TAX LAWS OF NIGERIA

CHAPTER ONE

GENERAL

INTRODUCTION

1.1 Background to the Study

Before a country considers how best to administer its tax system it must first possesses a clear picture of its tax system. The quality and quantity of resources required by tax administrations are to a large extent determined by the type of tax system which it is introduced. A nation‟s tax goals are not achieved by designing a tax system which is fair. Any fair system which is not administered as planned becomes inequitable. Thus, a good tax system is capable of financing the necessary level of public spending in the most efficient and equitable way possible. It should also raise enough revenue to finance essential expenditures without recourses to excessive public sector borrowing, raise the revenue in ways that are equitable that minimized its disincentive effects on economic activities, to do so in ways that do not deviate substantially from international norms.
It is common knowledge that one of the problems plaguing taxation in Nigeria has been the widespread tax evasion and avoidance which in the view of many experts in the tax field which has led to the loss of revenue which can be blamed on our inefficient and inept tax administrative machinery . There‟s no doubt that the administrative machinery in Nigeria still has a long way to go in terms of delivery and efficiency but it is believed that Nigeria‟s income tax law could in spite of their low rates and generous allowances, still have yielded much more revenue, but for the inefficient and defective assessment and collection machinery. For no matter how sophisticated and progressive a tax legislation is, it cannot be effective unless it is properly administered with competence and integrity. This is why in this paper we will be examining the problems facing the administration of petroleum taxation.
The Nigerian tax system has undergone several reforms geared at enhancing tax collection and administration with minimal enforcement cost.

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