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A LEGAL AND JUDICIAL EXAMINATION OF NIGERIA’S TAX COMPLIANCE STRATEGY FOR REVENUE GENERATION

A LEGAL AND JUDICIAL EXAMINATION OF NIGERIA’S TAX COMPLIANCE STRATEGY FOR REVENUE GENERATION

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ABSTRACT

The problem of taxation may be regarded as a required and obligatory monetary contribution paid by the inhabitants of a nation to their government in order to finance public operations. Its primary goals are to fund government or public spending on utilities in order to ensure efficient and economic growth, and to divide the nation’s resources as fairly as feasible. Every government in the world relies on tax money to fund public utilities and other important services. Therefore, taxation is a civic obligation of the citizenry. Until this concept is instilled in tax payers, the subject of voluntary tax payment compliance remains a phantom. Consequently, this might result in tax evasion and tax avoidance, which ultimately justifies the application of civil and criminal punishments against tax defaulters. This study’s basic premise is that tax payers in developing nations, notably Nigeria, dislike paying taxes. This unfavorable attitude dates back to the colonial period, when the government was seen as foreign. The residents were required to pay tax, and the resulting income was seen as being utilized for unknown purposes. The majority of illiterate persons do not regard tax payment to be significant. Nonetheless, this does not imply that taxes were foreign to Nigeria. Before colonial control, several regions of Nigeria levied taxes. The unwillingness of Nigerian residents to pay taxes persisted in both the public and private sectors of the economy long after independence. This research analyses the ineffectiveness or otherwise of the different tax legislation laws against tax offenses for this purpose. The sanctions were designed to deter potential tax evaders and avoiders. Despite the fact that various taxation regulations imposed penalties for any tax violation, it seems that the penalties are insufficient to prevent tax evasion and tax avoidance. Consequently, the purpose of this study is to assess the current condition of penal provisions pertaining to tax offenses and penalties by reviewing the doctrinal technique of research in tax legislation, case laws, text books, legal seminars, and publications, as well as online sources. Thus, it was determined that there is a need to review the criminal and civil consequences under the Nigerian income tax law to determine their efficacy. Therefore, it is proposed that a comprehensive tax law reform, heightened taxpayer knowledge of their need to pay taxes, and appropriate criminal measures against tax defaulters be implemented to ensure tax compliance as a strategy for revenue growth in Nigeria.

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xvi

CHAPTER ONE

GENERAL INTRODUCTION

1.1       Background to the study

Income tax is entirely the product of legislation. Consequently, there is no common law of

taxation. Other than the principles included in the, no other legal principles apply.

Taxation Acts in accordance with their real intent and effect. In every tax situation,

Consequently, the court or tax collectors must decide the precise meaning and

impact of the specific legislative provisions in issue. The real issue associated with

The function of tax administration is to enforce tax payment. This is the context in which the Personal

Income Tax Act of 1993 (as amended)1 and Companies Income Tax Act of 1990 (as modified) apply.

modified) included penalties for infractions of its terms. These are grouped

 

A LEGAL AND JUDICIAL EXAMINATION OF NIGERIA’S TAX COMPLIANCE STRATEGY FOR REVENUE GENERATION

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