AN APPRAISAL OF THE STRATEGIES FOR MAXIMUM TAX ASSESSMENT AND COLLECTION IN TARABA STATE, NIGERIA

AN APPRAISAL OF THE STRATEGIES FOR MAXIMUM TAX ASSESSMENT AND COLLECTION IN TARABA STATE, NIGERIA

CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
In the recent times various strata of government in Nigeria tare being faced with developmental challenges due to the dwindling and insufficient revenue at its disposal. Taraba sate is without exception. The meager sum collected as revenue allocation cannot complement fully the state statutory allocation from the federation account. Thus, the need to strategize toward improving non-oil tax revenue sources which are independent revenue sources available to states and local governments in Nigeria. Perhaps the efforts of government and tax agencies to improve tax administration and tax revenue yield will be meaningless except on appreciable level of voluntary compliance of taxpayers and effective enforcement of tax laws that can propel taxpayers’ behaviour to

obey tax laws. Modugu et al., (2012) conclude that voluntary compliance is significantly increased when government fulfil the social/fiscal contract with the governed. While, Akpo (2009) argued that citizens are reluctant to pay tax due to the failure of government to provide essential physical and social infrastructure for her people and therefore a failure of good governance. This implies that government failure to fulfil her promises to the citizenry can induce negative taxpayers’ morale, apathy of taxpayers to pay tax perhaps due to lack of provision of essential amenities by the government of the day. An indispensable tax administrative policy measure for improving tax revenue performance of state government is building a comprehensive and articulated
plan of action designed to induce voluntary compliance and effective implementation of tax enforcement program. Tax compliance is behavioural and requires strategies that can induce behaviour to succeed. Oyedele, (2016) identified why Nigerians are tax averse which include incoherent fiscal policies, complex and inefficient
tax management system, high level of tax leakages, complex tax laws, lack of transparency on utilization of tax revenue and visible development. How to improve tax revenue potentials of Rivers state governments in Nigeria through the instrumentality of consolidated and comprehensive tax compliance strategies so as to reduce the wide tax revenue gap is the concern of the researcher. There seems to be wider disconnection between tax
compliance system and revenue growth in Nigeria due to perceived weak application of a comprehensive and all inclusive plan of actions by government and tax authority that can propel voluntary tax compliance/self assessment, enforcement and penalties to resolve the lingering tax revenue yield problem of various governments Dandago (2015) identified the challenges of revenue collections in Nigeria to include neglect of many revenue sources, under utilization of some revenue sources, leakages, poor staing and training, weak structural, legal institutional and personnel commitment. It is essential that the state quickly and vigorously laid good strategies to optimize non-oil revenue to enhance public service delivery. Relatively, using enforcement will in no small
measure improve compliance level. However, James and Alloy (2010) contend that there is no doubt in the existence of sanctions in tax administration. However, the extent they are needed and the enthusiasm of enforcement raised questions. Using harsh enforcement as tax compliance strategy is beneficial for purposes of revenue drive and at the same time may have adverse consequences which may call for caution. In view of the above challenges is pertinent to carry out an empirical study to unravel the latent efficacy of voluntary compliance and tax collection strategies on tax revenue yield of Taraba state government, Nigeria.

AN APPRAISAL OF THE STRATEGIES FOR MAXIMUM TAX ASSESSMENT AND COLLECTION IN TARABA STATE, NIGERIA