COMPANIES INCOME TAX AND THE NIGERIA ECONOMY: CHALLENGES AND PROSPECTS

COMPANIES INCOME TAX AND THE NIGERIA ECONOMY: CHALLENGES AND PROSPECTS

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF STUDY

Every country in the world tends to generate income through tax administration. In Nigeria the company income tax administration aims and tries to tax each company in the state more effectively. However the level at which the company income tax Administration in Nigeria tend to achieve its desired goals and objectives depends mostly on the tax office and the company that is operating in Abia state. For the tax Administration in Nigeria to be effective the aspect of the companies been taxed should be considered adequately and more accurately so that the company would provide reliable financial performance information for assessment. In which the federal government derives its income. Due to the ever changing tax administration policies in the country and modifications in the aspect of taxation in Nigeria some companies want to stay afloat and employ all kind of strategies that benefits them. Some of them evade tax and some avoid tax. When tax in Nigeria is paid by the various companies operating in the state the revenue collected are used to provide utility services and providing additional government services such as in education and transport which are of great importance to the growth of the economy of the state and to the country. Tax administration in the country is a very important aspect that assist in the provision of revenue to the economy of which the avoidance of tax payment by the companies in the country in general and in Abia state in particular will result to a serious damage to the revenue which should have been generated and used for the provision of infrastructure. When a company is been taxed by the federal board of inland revenue (FBIR) the company is meant to give an accurate information about their income but some companies go to the extent of forgery in provision of their documents which gives an incorrect information to the board, thereby causing reduction in their tax assessment. Based on the above observation or trend of this action over time this study set out to examine the problems and prospects of the company income tax administration in Nigeria and in Abia state to be precise.