An important sacrifice one makes towards the upliftment of one’s country is the payment of tax. Revenue accrued from taxes are used by government to discharge its enormous responsibilities.
Therefore, we can say that taxation is the process or machinery by which communities or groups of persons are made to contribute part of their income in some agreed quantum and methods for the purpose of administration and development of the society.
It is a levy imposes by the government against the income, profit or wealth of individual, partnership and corporate organization. This is why it is often referred to as a civil obligation.
In Nigeria, there are other forms of taxation. Dating back to the days of our great grand fathers where by communities taxed themselves through communal labour to execute community projects or to help the community. This is still practiced in various parts of the country today. In that concept the basis and objectives of taxation are so laudable and acceptable. It is surprising that people still want to evade it or avoid it completely perhaps; it is the entire system that gives room for evasion, avoidance and other problem of taxation or may be the societal ills and failure that makes people want to evade it. Let us therefore now look at the structure and system of taxation in Imo state and appraise the effectiveness or otherwise and its problem.
1.1 BACKGROUND OF THE STUDY
The Nigeria tax system is basically structured as a tool for revenue collection; this is a legacy from the pre-independence government. Base on 1948 British tax laws and have been static since enactment. The need to tax personal income through out the country prompted the income management Act (ITMA) of 1961 in Nigeria personal income tax (PIT) for salaried employment is based on a pay as you earn to the 1961 ITMA Act
Federal board of Inland revenue was established in Imo state after the creation of the state in 1976. the major purpose of establishing this board was for collection and administration of tax system in the state and ensure that the revenue generated from tax are paid in the federal government account. As this board is been instituted in every states in Nigeria (i.e. 36 states) is to ensure successful implementation of economic policies and tax policies on collection procedures and also to made payment of tax easy for tax payers in the state but still it have not been easy to collect taxes. To many, tax payers do not declare actual income especially self-employed persons.
As the concept of taxation, the basis and objectives are so laudable and acceptable by every citizen of the state yet it is surprising that people still want to evade tax. Tax as we all know is levy imposed by the federal government against income, profit or wealth of individual, partnership and corporate organizations. This is why it is often referred to as an obligation.
1.2 STATEMENTS OF PROBLEMS
Taxation as one of the major source if revenue to the nation has suffered a lot of set back due to the unsuccessful implementation of economic policies on collection procedures for the government.
A lot of problems where inherent with tax collection system in Nigeria which will be highlighted below and this research intended to solve problems and make suggestion on how to improve on the present collection system.