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TAX ADMINISTRATION STRATEGY AND REVENUE GENERATION IN NIGERIA (1990-2012)






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TAX ADMINISTRATION STRATEGY AND REVENUE GENERATION IN NIGERIA (1990-2012)




CHAPTER ONE
INTRODUCTION
1.1   BACKGROUND OF THE STUDY
The field or Tax Administration Strategy and Revenue Generation has made great strides in the past two decades, moving from a rather arcane endeavour to one tested in dozens of countries including Nigeria and well established in a few other countries like the United States of American, Untied-Kingdom, Canada, among others (Akinnifesi, 1981; Ajaikoye, 1996; Ariyo, 1997; Auerbuch, 1999; Brown, 2000; Brown and Ariyo, 2001; Ene, 2004; Njoku, 2006; Hall and Jorgensen, 2008; Adesola, 2010).
In Nigeria, the direction and magnitude of the influence of Tax Administrative Strategy (TAS) on Revenue Generation (RG) is not clear and documented evidence is scarce (Philips, 2008; Justus, 2010). More so, the tax terrain in Nigerian is rather an expansive one. From Petroleum Profit Tax (PPT) to tenement rate imposition, there is a wide array of taxes and levies in between individuals and Companies, Citizens and Foreigners, Manufacturers and Markets, Workers and Pensioners among others, all are affected by this laid compulsion called tax exacted by legislative authority. The issues are so numerous; some are legal, economic and sociological to the extent that some are historical or political (Ipaye, 2002).
Tax according to Omotoso (2001) is a compulsory charge imposed by a public authority on the income of individuals and companies as stipulated by the government decrees, Acts or Cases laws irrespective of the exact amount of services rendered to the people in return. In fact, taxes are a compulsory transfer of resources to the government from the rest of the economy (World Bank, 2000). Simply, tax is a compulsory levy imposed on a subject or upon his property by the government to provide security, social amenities and created conditions for the economic well-being of the society (Appha, 2004; Appha and Oyandongha, 2011). A tax system offers itself as one of the most effective means of mobilizing a nation’s internal resources and leads itself to creating an environment conducive to the promotion of economic growth.
Tax is a principal source of government revenue; it should be accorded strict and close monitoring to achieve compliance (Reynold, 1963).
Taxes are administered in two different forms: Direct and Indirect tax such as: Personal Income Tax, Company Income Tax, Petroleum Profit Tax, Capital-Gains Tax, with-Holding Tax, Education Tax, Value Added Tax, Import Duties, Custom Duties, Excise Duties, Import Duties/Tariff, among others; categorized to suit the tax-payers to easily identify the form and type the payer belongs and for tax administration authorities among other functions to conveniently assess and collect taxes for the governments of Nigeria (Adesora, 1995: Adebisi, 2010).
 Nigeria is a Federation which operates a Three-Tier government namely: Federal, State and Local Governments; each of which has tax administration authorities viz: Federal Board of Inland Revenue (FBIR) which is now Federal Inland Revenue Services (FIRS), State Board of Internal Revenue (SBIR), also now Known as State Internal Revenue Services (SIRS) and Local Government Tax Authority (LGTA) all of which derived there creation and different jurisdictions from the Federal Laws (Odusola, 2006). Taxes constitute key sources of revenue to the Federal account shared by the Federal, State and Local Governments (Nzotta, 2007).
Financing government activities and programmes have not been an easy task time immemorial. These tasks have compelled government to evolve series of theories and legislations in an attempt at sourcing for fund and ensuring judicious utilization. In recent times, there has been chaos and controversies as regards Federal, State and Local government financial incapability to discharge their fiduciary responsibilities to the citizenry. The complaints of the levels of government have been inadequate statutory allocation which makes it almost impossible to carry out the tasks of effective administration and financing capital projects as well. The problem, no doubt is olden, it took a dramatic but melancholic turn at the inception of a democratic system of government in the millennium year 1999. The aftermath of the problem was retrenchment of workers and general apathy of some states and local government to embark on capital projects.
In the wisdom of the Federal Government, the Citizens were made to understand that thrice or more of the revenue allocated by the then Military regime to States and Local government is what the States and Local governments receive today in a democratic dispensation, therefore, they have no cause to complain.
Indeed, the history and development of sources of government funds over the centuries have always been a painful rehearsal of the controversy between the three conflicting extremes of government (Buhari, 2003). However, the increasing cost of running government coupled with dwindling revenue has left various state governments in Nigeria with formulating and adopting strategies to improve or increase the revenue base, tax rate and collection.
More so, the challenge of ever widening deficit and a near collapse of the National economy create serious financial stress for all the Tiers of Government. Statistically, hardest hit are the state governments all of which has experienced unusual reduction in their share of the National Revenue from the Federation Account. Despite the numerous sources of revenue available to the various Tiers of Government as specified in the Nigeria  1999 Constitution, since the 1970’s till now, over 80% of the Annual Revenue of the three (3) Tiers of Government come from Petroleum Profit Tax (PPT), and a residual amount of revenue less than 20% from other sources. Never-the less, the serious decline in the price of oil in recent years culminated to a decrease in funds available for distribution to the States. Premised on the forgoing, the States and Local governments as a matter of extreme urgency and importance contrived the need to explore and exploit available internal revenue sources to generation adequate revenue to finance government activities. This need under-scores the eagerness on the part of State and Local governments and even the Federal Government to look for new sources of revenue or to become aggressive and innovative in the mode of collecting revenue from existing sources.
To meet the inescapable need for increased revenue, both the Federal and State Governments in Nigeria came up with various Tax Administration Strategies to boost revenue generation under a programme known as the Accelerated Revenue Generation (ARG). In the light of the forgoing according to Oluwakayode and Arogundade (2011), in Lagos State over 300 tax consultants were engaged to assist the State over 300 tax consultants were engaged to  assist the State Board of Internal Revenue (SBIR) before the appointment of Chief Adekanola. They also added that Chief Adekanola was appointed in the first instance for a period of two-years precisely December 1, 1996 to May 31, 1998 as the sole tax consultant included that the tenets of the agreement included that 15% of the incremental revenue over and above the 450 Million-Naira monthly tax revenue ever recorded by the members of staff of the SBIR would be paid; and they failed to generate above the 450 Million-Naira they received nothing. This agreement was amended in January, 1997 stating that the tax consultants would be paid 10% flat-rate on any revenue generated. Furthermore, they revealed some part of the report of the Accelerated Revenue Generation Program (ARGP) showing the Performance of the tax consultants between 1996 and 1998 in the table below:



Table 1: performance of the consultants between December, 1996 and February, 1997:
Month of Account
Adjusted Revenue Collection
Average Monthly Collection
Increment in Revenue
Actual commission Paid
December, 1996
605, 373,721.44
450,000,000.00
155,373,721.44
27, 651,045.59
January, 1997
535,531,464.59
450,000, 000,00
85,531, 464.59
12,829,719.68
February, 1997
474,007,470.47
450,000,000.00
24,007,470.47
-
Total
1,614,912,656.50
1,350,000, 000.00
264,912,656.50
40,480,763.27

Source: Audit inspection report on the Accounts of Accelerated Revenue Generation programme (ARGP) for the period 1st December, 1996 to 31st May, 1998.
The Federal Government in a related move, also, appointed monitoring agents on Value Added Tax (VAT) and W    ith-Holding Tax (WHT) in the oil industry. In 1996, the Federal Government appointed Professional Import Duties Administration (PIDA) for the collection of import duties side by side certain customs officials. Some state governments on their part, appointed consultants to boost revenue generation in their States (Kiabel and Nwokah, 2009). These developments attracted diverse comments among various interest groups and individuals. While the imposition of taxes on individual and corporate bodies is under the Executive list of the constitution and the collection of such taxes is placed under the concurrent legislative list. This means, the power to collect the various taxes is shared among the three tiers of governments.
It is upon this background of legal (legislative) issues, which posit towards generating revenue sufficient enough for the machinery of each level of government that the issue of Tax Administration Strategy and is emanating problems and challenges were built.
Moreover, many multi-national development agencies required deficit reduction as a pre-condition for development assistance, which did not include reform of the Tax system and reduction of public expenditure as central objective. All these, necessitated the need for effective tax administration strategy especially in the developing countries, such as, Nigeria, where it is in- excusable to wide- spread corruption and its destructive consequence for the tax system in these countries as many studies regarding tax system show that more than 50% of tax revenue goes uncollected because of fiscal corruption and evasion  (Bird, 1990; 1992 and Krugman et al, 1992). According to CITA (2010), the tax administration machinery currently in existence in Nigeria includes:
a.     The joint Tax Board (JTB)
b.     The Federal Inland Revenue Services (FIRS).
c.     The State Board of Inland Revenue (SBIR)
d.     Local Government Revenue Committee.
e.     Joint State Revenue Committee.
A.     The Joint Tax Board (JTB) Composition:
a.     The Chairman of the Federal Board of Inland Revenue shall be the Chairman of the JTB.
b.     One member from each State, being a person experience in income tax matters nominated by the commissioner for finance of the State.
c.     The Secretary to the Board shall be appointed from the Federal Civil Service Commission being an officer experienced in income tax matters. The secretary shall not be member of the Board.
d.     The Legal Adviser of the Federal Board of Inland Revenue shall be in attendance at any meeting of the Board.
B.     Federal Inland Revenue Service (FIRS)
The FIRS Establishment Act, 2007 has replaced the Federal Board of Inland Revenue with the Federal Inland Revenue Service.
Establishment and Composition of the Management Board
v    Executive Chairman to be appointed by the President subject to the confirmation of the Senate.
v    Six members with relevant qualifications and expertise who shall be appointed by the President to represent each of the six geo- political zones.
v    The Governor of Central Bank or his representatives
v    A representative of the Minister of Finance not below the rank of a director.
v    The Chairman of the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) or his representative who shall be any of the commissioners representing the thirty-six States of the Federation.
v    The Group Managing Director of NNPC or his representative not below Group Executive Director.
v    The Controller-General of Nigeria Custom Service or his representative not below the rank of Deputy Controller-General
v    The Register-General of Corporate Affairs Commission.
v    The Chief Executive Officer of the National Planning Commission or his representative.
Technical Committee of the Board Composition
§  Executive Chairman of the Board as chairman.
§  All Directors and Heads of Department of the Service
§  The Legal Adviser of the service
§  The Secretary to the Board
C.     State Board of Internal Revenue (SBIR) Composition
a.     The Executive Chairman of the State Service who shall be a person experienced in taxation appointed by the State government from within the Sat service.
 b.    The Directors and Heads of Department within the State service.
c.     A Director from the State Ministry of Finance.
d.     Three persons nominated by the commissioner for Finance in the State on their personal merit.
e.     A Legal Adviser to the State Service
f.      The Secretary to the State service who shall be an ex-officio member.
Technical Committee of SBIR Composition:
a.     Executive Chairman as chairman.
b.     All Directors and Heads of Department of the Senate Internal Revenue Service.
c.     The Legal Adviser to the Board
d.     The Board Secretary.
D.     Local Government Revenue Committee:
This is to be established for each Local Government Area of each State.
Local Government Revenue Committee Composition:
a.     The Supervisor for Finance as Chairman
b.     Three Local Government Counselors as members.
c.     Two other persons experienced in revenue matters to be nominated by the Chairman of the local government on their personal merit.
Joint State Revenue Committee (JRSC):
This was established for each State of the Federation by Decree 19 of 1998.
JSRC Composition:
a.     The Chairman of the State Internal Revenue Service as Chairman.
b.     The Chairman of the Local Government Revenue Committee.
c.     A representative of the Bureau on Local Government Affairs not below the rank of a Director.
e.     The State Sector Commander of the Federal Road Safety Commission.
f.      The Legal Adviser of the State Board of Internal Revenue
g.     The Secretary of the committee who shall be an ex-officio member.
However, to achieve effective Tax Administration Strategy, it is imperative to understand and tackle the major constraints/problems facing effective and efficient Tax Administration in the country.
Finally, the obvious truth is that, most previous efforts are constituent on descriptive research, no known empirical effort had been made in this area and should there be any conducted, it is almost certain to be obsolete or out-dated.
This research, therefore seeks to identify the challenges which Tax Administration Strategy (TAS) posses to Revenue Generation (RG) on one hand and moderating influence of political influence, government policy and corruption on Tax Administration Strategy (TAS) and Revenue Generation (RG) on the other, and will make empirical evidence proposals for dealing with the identified challenges.
1.2   STATEMENT OF THE PROBLEM
The direction and magnitude of the influence of Tax Administration Strategy (TAS) on Revenue Generation (RG) is not clear and documented evidence is scarce in the Nigerian context. In view of these, the success or failure of any Tax System or Tax Administration is largely dependent on how much revenue it generates to cater for the public needs of the society.
However, effective Tax Administration Strategy (TAS) according to Akinlo (2004) involves balancing properly between equity and administrative ease. Equity provides that, incidence of direct taxation should broadly be the same on comparable income and wealth groups irrespective of the success of such incomes and forms in which the wealth is held; is an illusion in Nigeria. Administrative ease requires that tax due should be capable of quick and simple calculation and of prompt and convenient collection, rather than the complex and cumbersome process in use. Also, often times, there is conflict here, as the tax designers face the painful dilemma of being able to achieve improvement in equity only by increasing the difficulty of Tax Administration Strategy (TAS) or alternatively, to being able to reduce these difficulties only by increasing additional in-equalities (Toye, 1979 quoted in Akinlo, 2004; Ayo, 2005 and Njoku, 2007).
In another vein, section 4 (1) and (2) of the 1999 constitution of the Federal Republic of Nigeria empowered the National Assembly to make laws for the peace, order and good governance of the Federation or any part thereof, with respect to any matter included in the exclusive list. This list contains subjects like incorporation, regulation and winding-up of corporate bodies and taxation of income, Profit, VAT and Capital-Gains. The same constitution further reserves to the Federal Legislature the power to make laws with respect to matters in the concurrent list to the extent prescribed in the second columns of that list. Item 79 of that current list is a collection of Taxes. The Federal legislature is allowed top delegate the collection or administration of some taxes to the government or other authority of a state, provided however, that tax such as VAT, income or Profits of companies cannot be so delegated. Ipaye  (2002) asserts that this clearly justifies the inference that State may impose, collect and spend any tax fee or rate which has not been expressly reserved for the Federal Government control. The assumption is that, States could not have been required to delegate to the Local government councils what they could not by themselves do.
In Nigeria, the companies apart from the income tax paid to the Federal Government, the companies are subjected to a wide array of taxes, levies and rates by States and Local governments. These multiple taxes have led to massive protests by individual companies and their associations. They contend that corporate bodies should not be liable to any tax other than companies’ income tax and they should only be under the jurisdiction of the Federal Government. They also claim that these multiplication of taxes drive-up their cost of production, thereby, making products un-competitive and sometimes forcing them to go out of business. That it also places artificial restriction on Inter-State Commerce and makes the prices of locally produced goods un-competitive when compared with those of imported goods (Ipaye, 2002). This apparently is a huge challenges to increase in tax-base in the short and long-run inimical to increase in tax revenue. To this end, what really are the effects of Constitutional provision that reserves the taxation of companies’ profits and capital gains strictly for the Federal Government, among other legal requirements?
Also, the establishment of Federal Inland Revenue Service (FIRS) has attracted a great deal of attention from revenue authorities around the world. They are particularly concerned with the potential increase in tax avoidance and change jurisdictions. Tax-payers have a legitimate voice in a discussion of this nature because they bear the cost of any changes in tax systems. The cost burden could be directly through their tax payments or indirectly through the cost of complying with new reporting obligations. Tax professionals are equally challenged to learn about information technology (IT), lend their expertise in its design/implementation and be in a position to evaluate the tax implication of a technology enabled business environment (Umeh, 2004). This supposed triangulation (tax professionals, tax administration and tax payers) of information, design and implementation is a major challenge in Nigeria.
Obvious in the issue is a visit to each State of Nigeria, which convincingly depicts the picture of a dejected, lack of basic social and physical amenities fundamental to the lives of the citizens. These amenities are the mandatory obligation of the government to provide through public finance which “taxation” is a key payer to the citizenry. The failure of government to provide these basic amenities researchers reveal, is the bane of failure to voluntary compliance and apathy by tax-payers in Nigeria.
It is the light of the forgoing that this study seeks to empirically examine the impact of Tax Administration strategy (TAS) on Revenue Generation (RG) on one hand and the moderating effects of corruption and government policy have on the relationship between Tax Administration Strategy (TAS) and Revenue Generation (RG) on the other hand.


1.3   PURPOSE/OBJECTIVE OF THE STUDY
The general purpose of the study is to determine empirically the relationship between Tax Administration Strategy and Revenue Generation in Nigeria and to consider the effect of some contextual variables (Government Policy, Political Influence and Corruption) on this relationship.
The specific objectives of the study are to:
1.     Ascertain the extent of influence of Tax Legislation (TL) on company Income Tax (CIT) in Nigeria.
2.     Examine the extent of relationship between Tax Legislation (TL) and Petroleum Profit Tax (PPT) in Nigeria.
3.     Evaluate the effect of Tax Legislation (TL) on Value Added Tax (VAT) in Nigeria.
4.     Examine the relationship between Tax Consultancy (TC) and Petroleum Profit Tax (PPT) in Nigeria.
5.     Evaluate the effect of Tax Consultancy (TC)on Value Added Tax (VAT) in Nigeria.
6.     Identify the effect of Tax Consultancy (TC) on Company Income Tax (CIT) in Nigeria.
7.     Determine the extent of influence Inland Revenue Board (IRB) has on Petroleum Profit Tax (PPT) in Nigeria.
8.     Identify the relationship Inland Revenue Board (IRB) has on Company Income Tax (CIT) in Nigeria.
9.     Evaluate the effect of Inland Revenue Board (IRB) on Value Added Tax (VAT) in Nigeria.
10.   Determine the effect of Tax Consultancy (TC) on Petroleum Profit Tax (PPT) in Nigeria.
11.   Identify the influence of Tax Consultancy (TC) on Value Added Tax (VAT) in Nigeria.
12.   Evaluate the effect Tax Consultancy (TC) has on Company Income Tax (CIT) in Nigeria.
13.   Ascertain the effect of moderating factors (Government Policy, Political Influence and Corruption) mediate the influence of Tax Administration Strategy (TAS) on Revenue Generation (RG) in Nigeria.
It is in the light of the forgoing that this study seeks to empirically examine the impact of Tax Administration Strategy (TAS) on Revenue Generation (RG) on one hand and the moderating effects of Corruption, Government Policy and Political Influence have on the relationship between Tax Administration Strategy and Revenue Generation on the other hand.
1.4   RESEARCH QUESTIONS
In an attempt to address the pertinent problem of this study the following research questions are posed:
1.    To what extent does Tax Legislation (TL) affect Value Added Tax (VAT) in Nigeria?
2.    What possible relationship exists between Tax Legislation (TL) and Petroleum Profit Tax (PPT) in Nigeria?
3.    To what extend does Tax Legislation (TL) affect Company Income Tax (CIT) in Nigeria?
4.    What possible relationship exists between Tax Consultancy (TC) and Value Added Tax (VAT) in Nigeria?
5.    To what extent does Tax Consultancy (TC) affect Petroleum Profit Tax (PPT) in Nigeria?
6.    To what extent does Tax Consultancy (TC) affect Company Income Tax (CIT) in Nigeria?
7.    What possible relationship exists between Inland Revenue Board (IRB) and Value Added Tax (VAT) in Nigeria?
8.    To what extent does Inland Revenue Board (IRB) affect Petroleum Profit Tax (PPT) in Nigeria?
9.    To what extent does Inland Revenue Board (IRB) affect Company Income Tax (CIT) in Nigeria?
10.  To what extend does Political Influence (PI) affect Tax Administration Strategy (TAS) and Revenue Generation (RG) in Nigeria?
11.  To what extent can Government Policy (GP) affect Tax Administration Strategy (TAS) and Revenue Generation (RG) in Nigeria?
12.  To what extent can Corruption (C) affect Tax Administration Strategy (TAS) and Revenue Generation (RG) in Nigeria?
13.  Why taxation in the States of Nigeria not able to generation revenue sufficient enough to take care of the machinery of the government at each level?
1.5   CONCEPTUAL FRAMEWORK
The study variables are those shown in Figure 1. The figure shows the relationship between Tax Administration Strategy (Independent Variable) and Revenue Generation (Dependent Variable) from some selected tax handles of the Federal Government depicted by Value Added Tax (VAT), company Income Tax (CIT) and Petroleum Profit Tax (PPT) on one hand, and the relationship between Tax Administration Strategy (Independent Variable) depicted by Tax Legislation (TL), Tax Consultancy (TC) and Inland Revenue Board (IRB), and Revenue Generation (Dependent Variable) in Nigeria.
The study therefore, focuses on empirical examination of Tax Administration Strategy Influence on Revenue Generation from selected tax handles (PPT, CIT and VAT) of the Federal government in Nigeria and considers the effects of some contextual variables (Government Policy, Corruption and Political Influence).
Fig.1. TAX ADMINISTRATION STRATEGY AND REVENUE GENERATION
A CONCEPTUAL FRAMEWORK
 













1.6   RESEARCH HYPOTHESES
The above research questions lead to a number of hypotheses, here-under stated in null form and associated with each research question:
H01:  Tax Legislation (TL) has no significant effect on Company Income Tax (CIT) in Nigeria.
H02:  Tax Legislation (TL) has no significant effect on Petroleum Profit Tax (PPT) in Nigeria.
H03:  Tax Legislation (TL) has no significant effect on value Added Tax (VAT) in Nigeria.
H04:  Tax Consultancy (TC) has no significant effect on Value Added Tax (VAT) in Nigeria.
H05:  Tax Consultancy (TC) has no significant effect on Petroleum Profit Tax (PPT) in Nigeria.
H06:  Tax Consultancy (TC) has no significant effect on Company Income Tax (CIT) in Nigeria.
H07:  Inland Revenue Board (IRB) does not have significant effect on company Income Tax (CIT) in Nigeria.
H08:    Inland Revenue Board (IRB) does not have significant effect on Value Added Tax (VAT) in Nigeria.
H09:  Inland Revenue Board (IRB) does not have significant effect on Petroleum Profit Tax (PPT) in Nigeria.
H010: Corruption (C) does not have a significant effect on Tax Administration Strategy (TAS) and Revenue Generation in Nigeria.
H011:  Government Policy (GP) does not have a significant effect on Tax Administration Strategy (TAS) and Revenue Generation (RG) in Nigeria.
H012: Political Influence (PI) does not have a significant effect on Tax Administration Strategy (TAS) and Revenue Generation (RG) in Nigeria.
H013: Tax Administration Strategy (TAS) has no significant effect on Revenue Generation (RG) in Nigeria.

1.7   SCOPE OF THE STUDY
The scope of this study is viewed from the perspective of content scope, geographical scope and unit of analysis. The study covers Tax Administration Strategy and the three dimensions-Revenue Generation, its measurements and the mediating factors that influence the relationship in Nigeria environment.
The geographical area of the study is Nigeria. However, we will restrict ourselves to a State in each of the Six (6) geographical zones ceteris paribus; also, we shall limit ourselves to a Twenty-two (22) year period between 1990 and 2012.
1.8   LIMITATIONS OF THE STUDY
Although, the present study was intended to cover the entire Nigeria but due to limitations which took a toll on us, we could only cover two (2) zones (South-East and South-South) out of the six (6) geo-political zones of the country. This is consequent upon the security issues in recent times in most parts of the country, especially the Northern parts made it inaccessible for the researcher.

1.9   SIGNIFICANCE OF THE STUDY
Taxation is responsible for the circulation of income and the benefits accrued from the utilization of tax revenue are tangibly available to all citizens. Therefore, it is pertinent to assert that the study would be of immense importance to different groups of persons, organizations and even the government. Firstly, the results of this study would be relevant to members of the public, especially, those that wish to know the various areas of government operations which tax revenues are utilized. The study will broaden tax- payers horizon or knowledge on the area tax revenue are applied and in addition, show the effects of such revenue application on the productivity of companies in the public and private sectors.
The study will also be of great benefit to the Nigerian companies as it will enable them appreciate the effects of the government of Nigeria in economic development.
The study will provide useful information to management of companies on available tax revenues in Nigeria and encourage them to take advantage of the opportunity in increasing productivity, profitability, investment and business growth.
The growth of Nigeria will also find the study relevant. Through the findings, the government will be able to ascertain how the Tax Administration Strategy (TAS) affects Revenue Generation (RG) in the country. Thus, government will be revising with the information to make appropriate adjustment in fiscal policy measures to enhance productivity capacity and efficiency of companies in the Nigeria economy.
Finally, it is hoped that the study in entirety will contribute positively to knowledge in the area of Tax Administration Strategy and Revenue Generation improvement as many companies through this study will be familiar with types of Tax Administration that can improve their operations.
1.10 DEFINITION OF TERMS
Assessable Income: The aggregate total of a preceding year of a tax-payers income from all sources after the allowable deductions which includes losses.
Tax Consultant: Is a tax practitioner in the private-sector engaged by government for the collection of taxes.
Direct Tax: These are taxes payable by individuals and limited liability companies on their incomes, profits and property.
Government Agencies: This include FIRS, SBIR, EFCC, Local Tax Authorities, and the Nigerian Customs amongst others who assess and collect revenue for the government.
Indirect Tax: These are taxes payable on the value of goods and services received. Examples are Value Added Tax (VAT), Customs Stamp Duty among others.
Petroleum Profit Tax (PPT): These are taxes on petroleum operations which include obtaining petroleum oil by drilling or by extraction and the transportation of the oil so obtained by the company between the entre of operation and place of sale.
Tax Administration: The care and management to all such things deemed necessary and expedient for the assessment, collection, custody and accountability for revenue generated. In simplest terms, tax administration is the implementation of the tax law in order to achieve their objectives.
Tax Authority: A person or body of persons saddled with the responsibility under a law of a territory to impose tax on the income of individuals for the administration of the laws.
Tax Avoidance: A lawful method of achieving reduction of the tax liability through loop-holes, such as, producing more children, taking on more life assurance policies among others.
Tax Concession: lawful methods of achieving reduction of the tax liability were certain behavior of the tax-payer is actually sought. Any type of investment incentives (accelerated depreciation, initial allowance among others are typical examples).
Tax Evasion: Informal practices leading to deceit of tax agents by tax- payers. It is an illegal method of reducing one’s tax liability either by a mis-statement or omission of a source or sources of income, usually a deliberate act on the tax-payer not to pay tax due.
Value Added Tax: A tax imposed on the net sales value of non-exempt, qualifying goods and services in Nigeria.
Company Income Tax: Tax imposed on the profits of all corporate entities who are registered in Nigeria or derive income from Nigeria, other than those engaged in Petroleum operations.
Capital Gains Tax: Tax imposed on capital gains derived from sale or disposal of chargeable assets.
Political Influence: It is the political will to continue to strengthen, enforce or distort existing tax authority by successive government in Nigeria.
Government Policy: Is an effective rule document on Tax that establishment clear guidelines on crucial tax administration issues which among others include payment processing and collection, Record- Keeping, Audit and Investigation, Enforcement of tax laws and Registration of taxable persons among others.
Revenue Generation: Is the process of implementing and enforcing the legal framework regulating the assessment, collection and accounting for all taxes and levies to earn income for government expenditure.
Corruption: Is the process or act of Tax Officials colluding with Tax payers to defraud the Government by reducing assessment, collection, and remittance among others in Nigeria.
Tax Revenue: Is a part of an income derived from the collection of an imposed tax on individuals, legal entities and property owners in Nigeria.
Tax Legislation:  Is the passage of a tax bill into tax law by the National and State Houses of Assemblies in Nigeria.
1.11 ORGANIZATION OF THE STUDY
The study is organized into five chapters. Chapter one examines the Background of the study, which also contains the Research Problem, Purpose and Significance of the Study including the Research Questions. The chapter also highlighted the Scope and Limitations of the study. Included in this chapter are contextually defined Key Terminologies.
Chapter two will deal with a review of Related Literature. It also will highlight the Tax Administration Strategy, its concepts and Revenue Generation as well as the contextual variables adopted in the study. The chapter will end by bringing all relevant variables to the study in a conceptual framework which will show clearly how hypotheses were derived.
Chapter three will explain the Research Methodology used in the study which will include amongst others, the research design, research population, sample adopted for the study, methods of data collection and analysis, validity and reliability of research instrument and measurement of variables.
Chapter four will focus on the empirical aspects of the study, that is, a detailed presentation of data analysis and discussion of findings.
Chapter five will round-off the study with a summary of the conclusions, inherent implications of the conclusion and recommendation advanced in finality of the study.





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