THE DIFFICULTIES AND PROSPECTS OF TAX ADMINISTRATION IN NIGERIA.

THE DIFFICULTIES AND PROSPECTS OF TAX ADMINISTRATION IN NIGERIA (A CASE STUDY OF THE ABIA STATE BOARD OF INTERNAL REVENUE

CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Traditionally, taxation is a main source of revenue to government all over the world, tax thus becomes a burden that every citizen must bear to support the government. According to Olaofa (2008), the government has certain functions to perform for the benefits of those its government. The scope of these functions will depend on the political and economical orientation of the members of the society, their needs aspiration, unwillingness and ability to pay amongst others. Among the traditionally functions of the government is the provision of collective or public goods, goods that cannot be divided among the separate members of the society but which must be used for the benefit of all. Such goods include the maintenance of law and order, defence against external aggression, regulation of trade and business to ensure social and economic justice. As the functions of government increase, the revenue to finance those institution must necessarily increase. Thus, tax is a fact of life which is as old as the institutions of government for a fact, it is said, “tax is as certain as death” (Olarfe 2008). Abubakar (2008) posits that tax policies represent key resource allocation between the public and private sectors in a country. It is usually imposed on individual and confities that make up a country. The fund provided by tax are used by the state to support certain state obligations such as education system, health care system pension for the elderly, unemployment benefits and public transportation. A nations tax system is often a reflection of its commercial
values of the values of those in power.
Adekaula (1997), state that in Nigeria the taxation system dates back to 1904 when the personal income tax was introduced in Northern Nigeria before the unificiaries of the implemented, through the Native revenue ordinance to the western and eastern regions in 1917 and 1928 respectively. Among other amendments in the 1930’s it was later incorporated into direct taxation ordinance No. 4 of 1940. The need for personal income tax promoted the income tax management tax Act. (TIMA) 1961. An amendment followed in 1993 of section 27 now called section 85 other amendment, of PITA were that on 1996 and 1998. Apart from the personal income tax (PIT) other taxes charged in Nigeria include companies income petroleum profit tax, education tax, capital grains tax, information and technology tax etc. Those taxes are collected by different levels of governments depending on their areas of jurisdiction. The essences of amending tax laws is to amend for the loopholes existing in the tax system and to improve on the system of taxation in the country.

THE DIFFICULTIES AND PROSPECTS OF TAX ADMINISTRATION IN NIGERIA (A CASE STUDY OF THE ABIA STATE BOARD OF INTERNAL REVENUE