PROBLEMS OF ASSESSMENT AND COLLECTION OF PERSONAL INCOME TAX IN NIGERIA A CASE STUDY OF BOARD OF INTERNAL REVENUE DELTA STATE

CHAPTER ONE

1.0  INTRODUCTION

1.1  BACKGROUND OF STUDY

Government of a State needs money to secure its tertiary and to provide social services such as maintenance of law and order, security, lives and properly of its citizens. This is becomes compulsory that every subject of a State must given financial support to the Government as nearly as possible in proportion to their income. That is, in proportion to the revenue which they respectively enjoy under the  protection of the state (Smith, 1904:310).

    Therefore, tax is a compulsory levy imposed by Government against the income, profit, or wealth, of the individual partnership and corporate organizations

   Tabanisis Ochigu (1994:1) stated that “in Nigeria tax is levied on the authority of the Federal Government, income tax Government Act 1961 (FAMA) and subsequently amendments including the finance (Miscellaneous Taxation Provisions) Decree 1992 and the (Finance Miscellaneous provision) Decree 1993.

  These laws are not static as they are changed almost each year during the budget speech. The direction is determined by what the Government wants to achieve.

However, the yield from personal income Tax (PIT) has been less than the expect or budget. This poor yield has found to be as a result of personal income tax. This has adversely affected the yearly income of Government, since taxation is one of the major source of Government revenue

 Personal income tax was introduced in 1799, as a means of paying for the war against the French forces under napoleon. The cost of persecuting the war had drained Britains resources and run up a considerable national debt. The army was starving, and poor conditions in the Navy in 1797 had led to muting so tax was introduced as an “aid and contribution for the prosecution of the war”. Taxation had to continue amidst protests from people. Even lady Goliva Roda naked through the streets of currently in the century to persuade her husband to reduce it.

In the year 1979 where a tax clearance certificate issued to late Dr.Nnamdi Azikiweb was contested assessment as and when due. The court ruled that in accordance with the faster region finance low 1958, Azikiwe objected to the tax and made part payment of up to 50% of amount due accordingly and waited for his objection to be resolved thereafter and therefore was deemed to have paid his tax as when due.

   In the Northern Region, such part payment would not have sufficed, because in the personal income tax 1962 of the North full payment of tax most be made irrespective of pending objections tax legislation throughout the country.   In Delta State, this is the case study in one the thirty-six (36) States in Nigeria which is located in South- South region. The state capital is Asaba in Aniocha Oshimiri Federal Constituency. It is made up of twenty- seven (27) local Government Area.