Legal Implications of Tax Avoidance and Tax Evasion Under the Nigerian Tax Regime

Effiong Asukwo Esu

doi:doi:10.11648/j.ijber.20221106.12

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Legal Implications of Tax Avoidance and Tax Evasion Under the Nigerian Tax Regime

Effiong Asukwo Esu

Published in International Journal of Business and Economics Research (Volume 11, Issue 6)

Received: 4 August 2022 Accepted: 23 August 2022 Published: 15 December 2022

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Abstract

Modern governments need money to facilitate economic growth and development. Without any doubt taxation is the mainstay of government revenue. The revenue generated by the government from taxation forms a major source of finance to the nation's capital expenditure which is crucial to sustainable economic development. One of the objectives of the Nigerian tax system is to provide the government with stable resource for the provision of public goods and services. A major challenge to the government in generating this revenue has been the increasing rate of tax evasion and tax avoidance by citizens who are the main stakeholders. While some have blamed the situation on the tax authorities for not living up to expectation with regards to tax administration, others attribute it to the unpatriotic attitude of the taxpayers. It is in the light of these perplexing issues that this article examines the legal implications and the incidence of tax avoidance and tax evasion under the Nigerian current tax regime. The result of tax evasion and avoidance is the loss of huge revenue needed for development, and which may also hamper the proper performance of the public sector, thereby threatening its capability to finance public expenditure. It goes further to examine the factors that influence tax evasion and tax avoidance in Nigeria, and recommends that tax authorities should organize educative programs to enlighten tax payers on the different laws guiding the Nigerian tax system, the need for the payment of tax and the effect of non-payment of tax, and the implementation of some of the provisions of the newly enacted Finance Act.

Published in	International Journal of Business and Economics Research (Volume 11, Issue 6)
DOI	10.11648/j.ijber.20221106.12
Page(s)	314-320
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Tax, Tax Avoidance, Tax Evasion

References

[1]	(2015) 12 NWLR (Pt. 1474) 442.
[2]	EO Akanki, Commercial Law in Nigeria (University Of Lagos Press 2005 p. 67. See also Ade Ipaye, “Nigerian Tax Law & Administration: A Critical Review”, ASCO Prime Publications Ltd 2014 p. 90; I. Emeka, ‘Fraud, Corruption and Taxation’ (CITN Tax Conference paper 2013) p. 6; George Etomi, ‘An Introduction to Commercial Law in Nigeria, Text, Cases & Materials’ (MIJ Professional Publishers Limited, 2014 p. 4.
[3]	HCA 38, (1938) 80 CLR 263.
[4]	See Olalekan Soyode and Sunday O. Kajola, “Taxation Principles and Practice in Nigeria”, Revised Edition 2016 p. 10; Taofeeq Abdulrazaq, “Cases and Materials on Nigerian Taxation”, EBC Publishing; First Edition 2016 p. 35; Taofeeq Abdulrazaq, “Revenue Law and Practice in Nigeria”, Malthouse Press Limited, Third Edition 2015 p. 23.
[5]	Offiong U. Bassey, Taxation and Advanced Taxation (Best Brain Bookshop 2016) p. 23. See also Muhammed Taofeeq Abdulrazaq, “Revenue Law and Practice in Nigeria”, Malthouse Press Limited, Third Edition 2015 p. 1.
[6]	See C. S. Ola, “Income Tax Law and Practice in Nigeria”, Dalag Prints and Pak Ltd, Revised Edition 1999 p. 12; Oyesola Animashaun and O. Y Abdul-Hamid, “Changing Perspectives in the Law and Practice of Taxation in Nigeria” 2017 p. 33.
[7]	Kiabel B. D, Personal Income Tax in Nigeria (Springfield publishers 2001) p. 14.
[8]	Adebisi. J. F., and Gbegi. D. O., ‘Effect of Tax Avoidance and Tax Evasion' (1(1993) 1 NWLR (Pt. 272) 718(1993) 1 NWLR (Pt. 272) 718(1993) 1 NWLR (Pt. 272) 718993) 1 NWLR (Pt. 272) 718(1993) 1 NWLR (Pt. 272) 718 Personal Income Tax.
[9]	(1929) 14 T. C. 754.
[10]	Jalia Kangave, ‘Improving Tax Administration: A Case Study of the Ugandan Revenue Authority’ (2005) 9 (2) Journal of African Law p. 12; See also Abiola Sanni, ‘Power To Prosecute Tax Offences’ (2011) 2 NIALS Supreme Court Law.
[11]	CC Obeagu, ‘Does Deeming Provisions in Nigerian Tax Legislations Serve any Useful Practical Purpose?’ (2005) 6 Nigerian Journal of Legal Studies 20-33; See also J. A. A. Agbonika (ed) Topical Issues on Nigerian Tax Laws and Related Areas (Abada Press Limited: Ibadan 2015) p. 15.
[12]	Supra.
[13]	(1993) 1 NWLR (Pt. 272) 718.
[14]	Section 68 (1) (b) Personal Income Tax Act (PITA), 2011.
[15]	Sections 76 (1) and (2) of the Personal Income Tax Act.
[16]	Section 78 (1) of the Personal Income Tax Act.
[17]	Section 78 (2) of the Personal Income Tax Act.
[18]	Sections 98, 99 and 100 of the Personal Income Tax Act.
[19]	Section 48 of the CITA; see also Oyesola Animashaun and O. Y Abdul-Hamid, “Changing Perspectives in the Law and Practice of Taxation in Nigeria” 2017 p. 17; JU ack-Osimiri, ‘Stimulation of Investments in International Energy Through Nigerian Tax Exemption Laws’ (2003) XXVI (1) OPEC Review Austria. p. 13.
[20]	Referred to as the Service under the CITA. See sections 1, 8 and First Schedule to the Federal Inland Revenue Service Act.
[21]	Section 55 (i) (a) (b) & (c) of CITA.
[22]	Section 96 of the CITA.
[23]	Section 97 of the CITA.
[24]	Section 98 of the CITA.
[25]	Section 99 of the CITA.
[26]	Otherwise referred to as the FIRS Act.
[27]	Section 36, of the FIRS Act. The power to invoke the assistance of law enforcement agencies also extends to when it seeks to distrain the properties of a tax defaulter.
[28]	Section 41 of the FIRS Act.
[29]	Section 47 of the FIRS Act.
[30]	Section 48 of the FIRS Act.
[31]	Section 30 of the Tax Administration (Self-Assessment) Regulations, 2011.

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Effiong Asukwo Esu. (2022). Legal Implications of Tax Avoidance and Tax Evasion Under the Nigerian Tax Regime. International Journal of Business and Economics Research, 11(6), 314-320. https://doi.org/10.11648/j.ijber.20221106.12

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Effiong Asukwo Esu. Legal Implications of Tax Avoidance and Tax Evasion Under the Nigerian Tax Regime. Int. J. Bus. Econ. Res. 2022, 11(6), 314-320. doi: 10.11648/j.ijber.20221106.12

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AMA Style

Effiong Asukwo Esu. Legal Implications of Tax Avoidance and Tax Evasion Under the Nigerian Tax Regime. Int J Bus Econ Res. 2022;11(6):314-320. doi: 10.11648/j.ijber.20221106.12

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@article{10.11648/j.ijber.20221106.12,
  author = {Effiong Asukwo Esu},
  title = {Legal Implications of Tax Avoidance and Tax Evasion Under the Nigerian Tax Regime},
  journal = {International Journal of Business and Economics Research},
  volume = {11},
  number = {6},
  pages = {314-320},
  doi = {10.11648/j.ijber.20221106.12},
  url = {https://doi.org/10.11648/j.ijber.20221106.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20221106.12},
  abstract = {Modern governments need money to facilitate economic growth and development. Without any doubt taxation is the mainstay of government revenue. The revenue generated by the government from taxation forms a major source of finance to the nation's capital expenditure which is crucial to sustainable economic development. One of the objectives of the Nigerian tax system is to provide the government with stable resource for the provision of public goods and services. A major challenge to the government in generating this revenue has been the increasing rate of tax evasion and tax avoidance by citizens who are the main stakeholders. While some have blamed the situation on the tax authorities for not living up to expectation with regards to tax administration, others attribute it to the unpatriotic attitude of the taxpayers. It is in the light of these perplexing issues that this article examines the legal implications and the incidence of tax avoidance and tax evasion under the Nigerian current tax regime. The result of tax evasion and avoidance is the loss of huge revenue needed for development, and which may also hamper the proper performance of the public sector, thereby threatening its capability to finance public expenditure. It goes further to examine the factors that influence tax evasion and tax avoidance in Nigeria, and recommends that tax authorities should organize educative programs to enlighten tax payers on the different laws guiding the Nigerian tax system, the need for the payment of tax and the effect of non-payment of tax, and the implementation of some of the provisions of the newly enacted Finance Act.},
 year = {2022}
}

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TY  - JOUR
T1  - Legal Implications of Tax Avoidance and Tax Evasion Under the Nigerian Tax Regime
AU  - Effiong Asukwo Esu
Y1  - 2022/12/15
PY  - 2022
N1  - https://doi.org/10.11648/j.ijber.20221106.12
DO  - 10.11648/j.ijber.20221106.12
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 314
EP  - 320
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20221106.12
AB  - Modern governments need money to facilitate economic growth and development. Without any doubt taxation is the mainstay of government revenue. The revenue generated by the government from taxation forms a major source of finance to the nation's capital expenditure which is crucial to sustainable economic development. One of the objectives of the Nigerian tax system is to provide the government with stable resource for the provision of public goods and services. A major challenge to the government in generating this revenue has been the increasing rate of tax evasion and tax avoidance by citizens who are the main stakeholders. While some have blamed the situation on the tax authorities for not living up to expectation with regards to tax administration, others attribute it to the unpatriotic attitude of the taxpayers. It is in the light of these perplexing issues that this article examines the legal implications and the incidence of tax avoidance and tax evasion under the Nigerian current tax regime. The result of tax evasion and avoidance is the loss of huge revenue needed for development, and which may also hamper the proper performance of the public sector, thereby threatening its capability to finance public expenditure. It goes further to examine the factors that influence tax evasion and tax avoidance in Nigeria, and recommends that tax authorities should organize educative programs to enlighten tax payers on the different laws guiding the Nigerian tax system, the need for the payment of tax and the effect of non-payment of tax, and the implementation of some of the provisions of the newly enacted Finance Act.
VL  - 11
IS  - 6
ER  -

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Author Information

Effiong Asukwo Esu

Private & Commercial Law Department, Faculty of Law, Baze University, Abuja, Nigeria

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APA Style

Effiong Asukwo Esu. (2022). Legal Implications of Tax Avoidance and Tax Evasion Under the Nigerian Tax Regime. International Journal of Business and Economics Research, 11(6), 314-320. https://doi.org/10.11648/j.ijber.20221106.12

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ACS Style

Effiong Asukwo Esu. Legal Implications of Tax Avoidance and Tax Evasion Under the Nigerian Tax Regime. Int. J. Bus. Econ. Res. 2022, 11(6), 314-320. doi: 10.11648/j.ijber.20221106.12

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AMA Style

Effiong Asukwo Esu. Legal Implications of Tax Avoidance and Tax Evasion Under the Nigerian Tax Regime. Int J Bus Econ Res. 2022;11(6):314-320. doi: 10.11648/j.ijber.20221106.12

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@article{10.11648/j.ijber.20221106.12,
  author = {Effiong Asukwo Esu},
  title = {Legal Implications of Tax Avoidance and Tax Evasion Under the Nigerian Tax Regime},
  journal = {International Journal of Business and Economics Research},
  volume = {11},
  number = {6},
  pages = {314-320},
  doi = {10.11648/j.ijber.20221106.12},
  url = {https://doi.org/10.11648/j.ijber.20221106.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20221106.12},
  abstract = {Modern governments need money to facilitate economic growth and development. Without any doubt taxation is the mainstay of government revenue. The revenue generated by the government from taxation forms a major source of finance to the nation's capital expenditure which is crucial to sustainable economic development. One of the objectives of the Nigerian tax system is to provide the government with stable resource for the provision of public goods and services. A major challenge to the government in generating this revenue has been the increasing rate of tax evasion and tax avoidance by citizens who are the main stakeholders. While some have blamed the situation on the tax authorities for not living up to expectation with regards to tax administration, others attribute it to the unpatriotic attitude of the taxpayers. It is in the light of these perplexing issues that this article examines the legal implications and the incidence of tax avoidance and tax evasion under the Nigerian current tax regime. The result of tax evasion and avoidance is the loss of huge revenue needed for development, and which may also hamper the proper performance of the public sector, thereby threatening its capability to finance public expenditure. It goes further to examine the factors that influence tax evasion and tax avoidance in Nigeria, and recommends that tax authorities should organize educative programs to enlighten tax payers on the different laws guiding the Nigerian tax system, the need for the payment of tax and the effect of non-payment of tax, and the implementation of some of the provisions of the newly enacted Finance Act.},
 year = {2022}
}

Copy | Download

TY  - JOUR
T1  - Legal Implications of Tax Avoidance and Tax Evasion Under the Nigerian Tax Regime
AU  - Effiong Asukwo Esu
Y1  - 2022/12/15
PY  - 2022
N1  - https://doi.org/10.11648/j.ijber.20221106.12
DO  - 10.11648/j.ijber.20221106.12
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 314
EP  - 320
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20221106.12
AB  - Modern governments need money to facilitate economic growth and development. Without any doubt taxation is the mainstay of government revenue. The revenue generated by the government from taxation forms a major source of finance to the nation's capital expenditure which is crucial to sustainable economic development. One of the objectives of the Nigerian tax system is to provide the government with stable resource for the provision of public goods and services. A major challenge to the government in generating this revenue has been the increasing rate of tax evasion and tax avoidance by citizens who are the main stakeholders. While some have blamed the situation on the tax authorities for not living up to expectation with regards to tax administration, others attribute it to the unpatriotic attitude of the taxpayers. It is in the light of these perplexing issues that this article examines the legal implications and the incidence of tax avoidance and tax evasion under the Nigerian current tax regime. The result of tax evasion and avoidance is the loss of huge revenue needed for development, and which may also hamper the proper performance of the public sector, thereby threatening its capability to finance public expenditure. It goes further to examine the factors that influence tax evasion and tax avoidance in Nigeria, and recommends that tax authorities should organize educative programs to enlighten tax payers on the different laws guiding the Nigerian tax system, the need for the payment of tax and the effect of non-payment of tax, and the implementation of some of the provisions of the newly enacted Finance Act.
VL  - 11
IS  - 6
ER  -

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