ABSTRACT
In the tax administration of
any country, in-depth knowledge of tax paying attitude is very pertinent. This
is very consistent with this study the determinants of tax payers attitude in
Nigeria and whose purpose was to examine the variables that account for the
attitudes of tax payers and to ascertain whether or not such determinants allow
for the payment compliance, in view of tax assessment. A sample size of 320
taxable adults were selected from four (4) states in Nigeria as representative
of the taxpayers population. Chi-square tool of analysis was adopted to test
the hypotheses. As a consequence, a significant relationship was revealed
between religious beliefs and willingness to honour tax obligation. Also, it as
found that family pressure has a relationship with taxpayers’ attitude, while
compliance was shown between tax assessment and the Nigeria tax law. On discussion
of these findings, it was recommended that government should ensure equitable
distribution of the nation’s wealth to justify the money collected from tax and
that government should equally provide meaningful social infrastructure to
reflect the money paid; moreover, government was expected to give adequate
attention to financing education, to eradicate illiteracy and create
employment. Finally, an ethical element in tax planning has been suggested for
further study to stress the effect of tax avoidance and tax evasion.
CHAPTER
ONE
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
In developed
economies of the world, taxation provides the bulk of government revenue for
administration and development. Some goods and services that are consumed by
private sector cannot be equal amount. These include social and economic
infrastructures like health services, basic education, motorable roads, the
maintenance of law and order and the provision of public utilities. These are
goods which structure is such that the consumption of the products by various
individuals is non-rival in the sense that one person’s partaking of the
benefits does not reduce the benefit available to another (Musgrave:1985:10).
That is, the benefit derived by one person is externalized, in that. It becomes
available to another person at the same time (Umoh:1997:24).
The private sector
cannot provide these types of goods (social goods), the structure of the goods
provided by them is internalized, and the benefit of consumption excludes
consumption by another… “the market mechanism is well suited for the provision
of private goods” Musgrave (1985:10). It
is based on exchange and this can occur only where there is an exclusive title
to property, which is to be exchanged. It furnishes a signaling system where by
procedures are guided by consumer demands.
On the other hand,
it is inefficient to exclude any consumer from partaking of the benefit of
social goods when it is quite obvious that participation would not reduce
consumption by another regardless of earning differential. However, the
provision of these social and economic infrastructures and other complementary
facilities obviously requires financial resources and supply of which is from
the imposition of tax.
Inspite of the
multiple benefits of taxation creation amongst the populace, taxable persons
are still cajoled and compelled to pay their taxes. They seem to put up
resistance that create the impression that they are not happy paying the tax or
that they are paying more than they are receiving in terms of social amenities.
As a further
measure to reduce the assumed tax burden and motivate the people to be
tax-active, the Federal Government in the 1998 budget announced tax relied and
allowances packages whose entitlement does not discriminate against gender,
provided there is no two allowance claim by husband
and wife on the same child for children allowance; exemption of the capital
gains tax on gains from worker whose total annual income is below N30,000 from
paying tax, abrogation of disposal of the scope of graduate rates; taxing gas
development projects under companies income tax Act of petroleum profit tax
act; the extension of gas utilization down stream operations to industrial
projects, extension of the initial tax holiday period of three years to five
years; transmission of gas at zero percent Petroleum Profit Tax (PPT) and zero
percent royalty etc.
These fiscal
measures enunciated have not only the potential of reducing tax burden but also
to stimulate production and generate employment thereby fostering economic
advancement. But this requires the voluntary compliance, no matter how reduced
the burden is whether at the individual or at the corporate level.
Most people take
pleasure in evading tax, others exhibit recalcitrant disposition when it comes
to fulfilling their tax obligation, a situation which Naiyeru in his article
titled “Taxation and Economic Development” attributed to value orientation (Naiyeru
1988). According to Brain and Paul (1996:269-287) “the lack of adequate and
imperfect information process is responsible for this situation (i.e.
Tax agent, tax payer of
conflict). He further asserts that the tax agent is ignorant of what the
taxpayer is to pay, since he or she cannot capture a complete and accurate
assessment of what he owed. Corporate taxpayers have elaborate records which
are simply too voluminous to analyze completely and individual taxpayer may
have no records at all. Situations like this compel the revenue agent to look
beyond the superficial appearance as presented in the tax forms and the
supporting documentation. Records can be forged and books can be cooked, so the
revenue agent must adopt a skeptical stance that gives to the informal motto of
the tax examination division (Audit the taxpayers not the return” Brain
(1996:15).
Inspite of the
aforementioned and bearing in mind several investigations already conduct on
issues relating to taxation in Nigeria, a missing link which is very
conspicuous has been a complete lack of an empirical perception or study on the
determinants of tax payers behaviour. It is based on this premise that the
study anchors. Therefore, attempts shall be made to adequately delve into these
determinants to unravel how they influence attitudes of taxpayers’ payments.......
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