CHAPTER ONE
GENERAL INTRODUCTION
Background to the Study.
One instrument use as a key to unlocking the resources required for public investment and infrastructural growth is tax. The process of levying and collection of tax i.e. taxation is a very complex and highly dynamic system with constant changes in the economic environment where it operates, hence the need to review from time to time the instruments regulating the levying, collection, administration and enforcement of tax.1
In Nigeria, what added to the complexity of the system is the Federal character of the country. Under a Federal system like Nigeria, powers are shared between the central and state governments which also include power to impose or levy tax within the jurisdiction of the government concern. In Nigeria the power of levying and collection of taxes are shared between Federal and State governments2, and therefore, administration of tax is made at two tiers of governments i.e. by the Federal Inland Revenue Services at Federal level and various States Board of Internal Revenue at State level3. This division occasionally brings about disagreement between the two tiers of government as to which government should collect what tax?4This of course affected the smooth running of the system in the country.