Project Abstract

Abstract
Income tax evasion and avoidance are prevalent issues in Nigeria, leading to substantial revenue losses for the government. This research project aims to analyze the causes of income tax evasion and avoidance in Nigeria and explore potential remedies to address these challenges. The study will employ a mix of qualitative and quantitative research methods, including interviews, surveys, and data analysis. The causes of income tax evasion and avoidance in Nigeria are multifaceted and include factors such as high tax rates, complex tax laws, weak enforcement mechanisms, corruption, and a lack of taxpayer education. By identifying these root causes, the study aims to provide insights into how the Nigerian government can design more effective tax policies and enforcement strategies to combat tax evasion and avoidance. Furthermore, the research will investigate the impact of income tax evasion and avoidance on the Nigerian economy, government revenue, and social welfare. By quantifying the extent of revenue losses due to tax evasion and avoidance, the study aims to highlight the urgency of addressing these issues and implementing reforms to improve tax compliance. In terms of remedies, the research project will explore various policy options to curb income tax evasion and avoidance in Nigeria. This includes recommendations for simplifying tax laws, enhancing tax administration capacity, improving transparency and accountability in tax collection, and promoting taxpayer education and awareness programs. The study will also assess the potential role of technology and digital platforms in modernizing tax systems and reducing opportunities for tax evasion. Overall, this research project contributes to the existing literature on income tax evasion and avoidance in Nigeria by providing a comprehensive analysis of the causes of these phenomena and proposing practical solutions to mitigate their adverse effects. The findings of this study are expected to inform policymakers, tax authorities, and other stakeholders on the importance of addressing tax evasion and avoidance to ensure sustainable revenue generation, promote economic development, and enhance social welfare in Nigeria.

Project Overview

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

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1.2   STATEMENT OF THE PROBLEM  

Tax is a compulsory levy, which a government imposes on the income of eligible citizen in a state of which the government makes no direct benefit on the taxpayer. Revenue means the money government receives from tax. In this situation, tax evasion is a strong weapon, which fight against the revenue generation in our country. As we know that tax evasion is the deliberate attempt of a taxpayer not to pay tax while avoidance is refers to attempt of a taxpayer to reduce his tax liability in order to pay little as tax.

This action affects the generation of revenues in Nigeria. it makes the objectives of which tax is meant for not to be achieved. Despite all the efforts made by the government to prevent the problem of tax evasion and avoidance, there are still reduction in the development of growth in the economy. Also reduction in capital expenditure, recurrent expenditure economic growth, monopolistic problem and national debt. As a result of this, my focus is to discover the causes of this problem in the economy. Again to find out the possible solutions to this ugly problem.

1.3  RATIONALE OF STUDY

Having seen the rate at which people evade and avoid tax, it is now necessary to know how this research will be useful to curtail this problem at hand. Another reason why the study is necessary now is to help the tax authorities map out the necessary strategies to collect taxes to avoid the issue of tax evasion and avoidance. Again, having seen that the revenue generation of our country depends mostly on tax and in the absence of that, the country will not be able to meet up with daily problems, so it is necessary to see a way out to avoid tax evasion and avoidance in order to reduce its effect on our revenue generation in the country Set-backs on capital projects as a result of shortage of funds due to low income generation from tax and other sources is a problem to be addresses adequately. So, the problem of tax evasion and avoidance must adequately be traced, so that the country will increase her capital projects from funds generated from tax.

1.4  SIGNIFICANCE OF THE STUDY

Having seen the rate at which people evade and avoid tax and the subservient effect it brings in the revenue generation of the country, the researcher however has come out with some possible solutions to this problem in the economy. This entails that the research will serve as a possible solutions to the problems of tax evasion and avoidance in the society. More still, tax authorities and officials will find this research rewarding as the research vividly pointed out the various forms of tax evasion and avoidance and also show the effects of such in the economy. Finally, the research will be of great importance to further researchers on tax evasion and avoidance in the society.

1.5 DEFINITION OF TERMS

Tax can be defined as a compulsory levy imposed upon the eligible citizens of a state by the government of that state

TAX EVASION: Can be defined as contravention of the tax law, whereby a taxable individual or company neglects to pay tax due to him.

TAX AVOIDANCE: Simply means the act of dodging tax without actually breaking the law

REVENUE:  Taxes, which a government receives

INCOME TAX: This is tax based on ones income

COMPANY INCOME TAX: This is tax levied on gross profit of companies. The higher the gross profit of a company, the higher the tax it pages.

TAX AUTHORITIES: This refers to the person or body of person responsible under law for collection of taxes.

CANNONS OF TAXATION: These refer to principles governing taxes.

TAXPAYER: One who pays tax