ABSTRACT
This study on efforts to eradicate tax avoidance and evasion in Nigeria (a case study of Akwa Ibom State Internal Revenue Service, Uyo), was carried out to examine the efforts made by tax authorities to eradicate tax avoidance and evasion in Nigeria’s economy in terms of actual tax received and gross domestic product (GDP). It employed trend survey design in order to facilitate the comparism of GDP and actual tax received for 10 years. Staff of Akwa Ibom State Internal Revenue Service constituted the population of the study. The sample size for this study was 19 staff of the service determined using Taro Yamane Technique. Primary data were collected through the administration of questionnaire to the staff of the revenue service, textbooks and journals, while extract of Akwa Ibom State Internal Revenue Service periodic publication formed the secondary data collected. The hypothesis was tested using Spearman Rank Order Correlation Coefficient to analyze the relationship which subsists between the stated variables. The hypothesis tested showed that there is a significant effect of tax avoidance and evasion on the economic development of Nigeria. Findings reveals that despite the mechanism adopted by tax authorities to eradicate tax avoidance and evasion in Nigeria, the problem still persist and this pose a negative effect in the country as it leads to abandoned projects and programmes due to low resources, it also reveals that the possible causes of tax avoidance and evasion are dishonestly, complains of high tax rate, greed and selfishness on the part of some taxpayers amongst others. Conclusion drawn from the study was that government all over the world needs revenue to run the affairs of their states, and as such, tax serves as a medium to raise revenue to finance government proposed development project which is beneficial to the citizens of the society. The study recommends that government should seriously look into the implementation of tax laws, tax system should be computerized to ensure efficiency and quality delivery, tax agents should be rotated to avoid corrupt practices, and above all taxpayers should be educated about their civil responsibility.
TABLE OF CONTENTS
Title Page
Certification – – – – – – – – ii
Dedication – – – – – – – – – iii
Acknowledgement – – – – – – – iv
Abstract – – – – – – – – – v
Table of Contents – – – – – – – – vi
List of Tables – – – – – – – – vii
CHAPTER ONE
1.0 INTRODUCTION
- Background of the Study – – – – – 1-5
- Statement of the Problem – – – – – 5-6
- Objective of the Study – – – – – 7
- Statement of Hypothesis – – – – – 7-8
- Research Questions – – – – – 8
- Significance of the Study – – – – – 8-9
- Scope/Limitations of the Study – – – – 9
- Organization of the Study – – – – 10
- Definition of Terms – – – – – 11-12
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.0 Introduction – – – – – – – 13-14
2.1 Tax Administration in Nigeria – – – – 14-16
2.2 Tax Laws in Nigeria – – – – – – – 16-17
2.3 Reasons of Taxation on the Economic
Development of Nigeria – – – – – 17-19
2.4 Concept of Tax Avoidance and Evasion – – – 19-21
2.4.1 Differences between Tax Avoidance and Evasion – 22
2.4.2 Techniques of Tax Avoidance and Evasion – – 23
2.5 Causes of Tax Avoidance and Evasion in Nigeria – 23-26
2.6 Effects of Tax Avoidance and Evasion in Nigeria – 26-28
2.7 Mechanisms to Eradicate Tax Avoidance and
Evasion in Nigeria – – – – – – 28-30
2.8 Concept of the Unique Taxpayer Identification
Number (U-TIN) – – – – – – – 30-33
2.9 Effect of Actual Tax Received on Gross Domestic
Product in Nigeria – – – – – – 33-35
End Notes
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction – – – – – – – – 37
3.1.1 Restatement of Hypothesis – – – – – 37
3.1.2 Research Questions – – – – – – 38
3.2 Design of the Study – – – – – – 38-39
3.3 Area of the Study – – – – – – 39
3.4 Population of the Study – – – – – 39
3.5 Sample and Sampling Technique – – – – 39-40
3.6 Instrument/Methods for Data Collection – – – 40
3.7 Data Analysis Technique – – – – – 40-41
CHAPTER FOUR
4.0 DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Introduction – – – – – – – 42
4.2 Data Analysis – – – – – – – 42-57
CHAPTER FIVE
5.0 FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Introduction – – – – – – – – 58
5.1 Findings – – – – – – – – 58-59
5.2 Conclusion – – – – – – – – 59-60
5.3 Recommendations – – – – – – 60-61
References
Appendix(ces)
CHAPTER ONE
INTRODUCTION
- BACKGROUND OF THE STUDY
Tax avoidance and evasion is the major social problems hindering revenue generation in developing state and eroding the existing welfare in Nigeria. Taxation has played a vital role in people’s live and in all economic around the global.
Tax evasion generally refers to illegal practices to escape from taxation. It is also fraudulent, dishonest, intentional distortion or concealment of facts of figures with the intention of avoiding the payment of or reducing the amount of tax payable, while tax avoidance according to Nwakagi and Ewah (2010, p. 56) refers to a taxpayer’s effort to avoid paying tax by finding a legal loophole in the tax system. It could also be said to be an argument of affairs in such a manner so as to pay minimum amount of tax due. An example of tax avoidance is strategized tax planning where financial affairs are arranged in order to minimize tax liabilities e.g. using tax deductions and taking advantages of tax credit.