1

CRITICAL APPRAISAL OF THE NIGERIA TAX LAWS AS

ADMINISTERED BY ENUGU STATE GOVERNMENT
2000-2010

BY

ANINWENE EKENE CELESTINE

PG/MBA/10/55237

DEPARTMENT OF ACCOUNTANCY FACULTY OF

BUSINESS ADMINISTRATION
UNIVERSITY OF NIGERIA

DECEMBER, 2011.
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TITLE PAGE

CRITICAL APPRAISAL OF THE NIGERIA TAX LAWS AS

ADMINISTERED BY ENUGU STATE GOVERNMENT
2000-2010

BY

ANINWENE EKENE CELESTINE

PG/MBA/10/55237

A DISSERTATION PRESENTED IN PARTIAL

FULFILMENT OF THE REQUIREMENTS FOR THE AWARD
OF MASTER OF BUSINESS ADMINISTRATION (MBA) IN
THE DEPARTMENT OF ACCOUNTANCY FACULTY OF
BUSINESS ADMINISTRATION, UNIVERSITY OF NIGERIA
ENUGU CAMPUS

SUPERVISOR: MR. R O. UGWOKE

DECEMBER, 2011.
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APPROVAL PAGE

This is to certify that ANINWENE EKENE CELESTINE

postgraduate student in the department of Accountancy and
with Registration Number PG/MBA/10/55237 has
satisfactory completed the requirement for project research
in partial fulfillment for the Award of Masters of Business
Administration (MBA) in Accountancy.

Dr. R. O. Ugwuoke Dr. R. O. Ugwuoke

Supervisor Head of Department

Date Date
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DECLARATION

I, ANINWENE EKENE CELESTIN, a postgraduate student in

the Department of Accountancy with Registration Number
PG/MBA/10/55237, hereby certify that this project work is
written by me and that the work embodied in this project is
original and has not been submitted in part or full for any
other Diploma or Degree of this or any other University.

ANINWENE EKENE CELESTINE

PG/MBA/10/55237
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DEDICATION

This project work is dedicated to God Almighty for his

kindness towards the successful completion of this MBA
programme. And to my Late parents Chief and Mrs S.O.
Aninwene.
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ACKNOWLEDGMENTS

I give glory to God Almighty for his infinite mercies

towards the completion of this work, his strength, life,
knowledge and wisdom that made the completion of this
study a success.
My extreme gratitude goes to my supervisor Mr Ugwoke
R.O. for his patience, useful suggestion and understanding,
his role in this project is immeasurable may the God
Almighty bless him.
My appreciation also goes to Mr. Ojobo and Mr.
Ikwueze and all other staff of Enugu State Board of Internal
Revenue Enugu, that I used as my case study for their
useful information and support for the success of this work.
My thanks also goes to a host of authors who I in one
way or the other used and adopted their intellectual
property.
Finally, I wish to express my profound gratitude to my
brothers and sisters and my friends who in one way or the
other made various contributions towards making this
programme a reality.
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ABSTRACT

Since advent of the oil boom in Nigeria, taxation as the major

source of public finance was neglected. The Nigerian major
source of revenue became proceeds from crude oil Now that
there is imbalance in allocation of revenue from oil sales by the
federal government to states and local government. Government
and people now seek alternative or ways to augument the
insufficient amount received as their share of federal allocation.
This now leads to taxation as an indispensable tool in economic
planning and development of any nation. This study is therefore
aimed at critical appraisal of Nigerian tax laws as administered
by Enugu State government. To carry out the study, data for
research were collected based on secondary data (Time series
data) from staff of Enugu State board of internal revenue in
Enugu, supplemented by personal interview. Data collected
were analyzed using Z-tests which are two sample Z-test used
for 2000-2005 and one sample Z-test used for 2006-2010 which
led to rejection of null hypothesis in chapter one.
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TABLE OF CONTENTS
Title page - - - - - i
Approval page - - - - - ii
Dedication - - - - - iii
Acknowledgements - - - - - iv
Abstract - - - - - v
Table of Contents - - - - - vi
List of Tables - - - - - ix
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study - - - - - 1
1.2 Statement of the Problem - - - - - 4
1.3 Objectives of the Study - - - - - 6
1.4 Research Question - - - - - 6
1.5 Research Hypothesis - - - - - 7
1.6 Area of Study - - - - - 7
1.7 Scope of the Study - - - - - 8
1.8 Limitations of the Study - - - - - 8
1.9 Significance of the Study - - - - - 9
1.10 Operational Definition of Key Terms - - - 10
References
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.0 Introduction - - - - - 13
2.1 Overview of Taxation System in Nigeria - - 13
2.2 The Nature of Tax - - - - - 15
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2.3 Purpose of Tax - - - - - 18

2.4 Qualities of a Good Tax-System - - - 21
2.5 Tax Legislation - - - - - 24
2.6 Administration of Tax In Nigeria - - - 36
2.7 Administration of Tax By Enugu State Government 43
2.8 Use Of Consultants in Tax Administration - 51
2.9 The Role of the Judiciary - - - - 52
2.10 Failure of Tax Administration - - - 55
References
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
CHAPTER THREE

3.0 Research Design and Mythology - - - 60

3.1 Research Design - - - - - 60

3.2 Area of Study - - - - - 61

3.3 Sources of Data - - - - - 61

3.4 Instrument for Data Collection - - - 61

3.5 Specification of Models - - - - - 61

3.6 Method of Data Analysis - - - - - 62
References

CHAPTER FOUR
4.0 Presentation, Analysis And Interpretation of Data 64
4.1 Data Presentation - - - - - 64
References
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CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS
5.1 Summary of Findings - - - - - 111
5.2 Conclusion - - - - - 113
5.3 Recommendation - - - - - 115
5.4 Recommendation for Further Studies - - 117
Bibliography
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LIST OF TABLES

Table 2.1 Enugu State Board of internal

Revenue, Estimate/actual revenue
collection from year 2000-2005 - 49

Table 2.2 Enugu State Board of Internal

Revenue, Actual revenue collection
from year 2006-2010. - - 50
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CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Tax is an important factor in economic planning and

development of every nation, also it is an important agent of

social change.

Taxation as defined by Ogundele (1999), is the process

or machinery by which communities or groups of persons

are made to contribute in some quantum and method for the

purpose of the administration and development of the

society. It can be inferred that the payment of tax will in

turn be beneficial to the entire citizenry. This view is also

similar to the definition of Soyode and Kajola (2006) who

defined tax as a compulsory exaction of money by a public

authority for public purposes. Nightingale (1997) described

tax as a compulsory contribution imposed by the

government on the citizenry. These various authors

concluded that it is possible for tax payers not to receive

anything identifiable for their contribution, but that they

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have the benefit of living in a relatively educated, healthy

and safe society. However, the infrastructure which tax

payers are supposed to enjoy is in a deplorable condition (Fa

Funwa, 2005), educational system is in disarray (Obajo

2005) and the health system is in a worrisome condition

(Lambo 2005).

Tax is an instrument of fiscal policy, which plays a

leading role in every organized society irrespective of the

political or constitutional structure. Once a society becomes

stabilized, civilized or law abiding the functions of

government becomes enormous resulting in heavy

expenditure and necessitating tax payments by its subjects.

Tax as the transfer of resources from private sector to public

sector in order to accomplish some of the nation’s economic

and social goals.

Further more, tax is a compulsory levy imposed on the

payer by a legal authority or recipient public authority.

Throughout the history of mankind, the right to raise tax

has been one of the principal features of political authority.

For a country like Nigeria, the primary economic goal is to

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increase the rate of economic growth and hence the per

capital income which will lead to higher standard of living,

through the provision of based infrastructure which is quite

necessary. This perhaps explains why the government shows

great concern for a medium through which fund can be

made available to achieve their set goals for the society.

Government needs money (fund) to be able to execute its

social obligation to the public, these social obligations

include the provision of infrastructure and social services.

According to Murkur (2001), meeting the needs of the

society calls for huge funds which an individual or society

could not contribute alone. It becomes the responsibility of

government to source for the funds to enable her provide

these basic amenities to the citizenry who are the

beneficiaries. One of the medium through which fund is

derived is through taxation. Therefore, the citizenry are

expected to discharge their civic responsibility by paying

their taxes as these contributed to the development and

administration of the society at large.

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1.2 STATEMENT OF THE PROBLEM

There have been a heart provoking outcry by various

government in Nigeria over their poor financial base

(Ogundale 1999) The situation is becoming even more

compounded by the obvious demanding feature of our oil

economy. Moreover, inspite of broadness and the

comprehensive nature of our tax system, tax avoidance and

evasion are on the increase. The ugly development has

placed most state government in situation where they can

not cope with their civic responsibilities to their citizen,

hence a compelling need to put an end to this unwholesome

circumstances through proper problem identification.

Much has been published about the inefficiency of

Nigerian tax laws, multiple taxes, excessive tax rates and

poor tax administration (Soyode and Kojola 2006). A more

fundamental problem that needs to be addressed if our tax

system is going to attain optimally efficient however is the

unwillingness and refusal of Nigerians to pay tax. The

unwillingness to pay tax could be a universal phenomenon

yet the Nigerian situation is some what peculiar. In most

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jurisdictions, especially in developed countries, income

earners still pay their taxes because there are obvious

reasons to justify the payment of such taxes.

The recent U.K budget demonstrated that there is a

link between taxation and benefits derived from the

populace via the national health scheme. The problem in

Nigeria is that even though the constitution imposes the

duty to pay tax, Nigerians do not see a moral ground to pay

taxes, neither are they inspired nor encouraged to do so.

After all, to what extent has government fulfilled its

constitutional obligation to provide security and welfare?

Many are of the opinion that the amount that they expend

on regular basis on alternative means of power and water

supply, the high cost of transportation, telecommunications,

private medical and educational bill already constitute a tax.

Government should not dismiss these argument or consider

them frivolous. Rather they should act as a catalyst for a

major reform of our tax policy.

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1.3 OBJECTIVES OF THE STUDY

The main objective of this study is to critically appraise

the Nigerian tax laws as administered by Enugu state

government specifically, the study intends to achieve the

following objectives.

1. To determine whether there is any significant difference

between the mean targets and mean actuals of tax

collection in Enugu state between 2000-2010.

2. To determine the level of compliance on tax collection

from 2000-2010

3. To recommend policies that will help in effective tax

administration in Enugu state

1.4 RESEARCH QUESTION

Based on the objectives of the study, the following

research questions were formulated.

1. Is there any significant difference between the mean

targets and mean actuals of Tax collection in Enugu

state between 2000-2010?

2. What is the level of compliance on tax collection?

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3. What policies or measures could be adopted to

improve the tax administration in Enugu state?

1.5 RESEARCH HYPOTHESIS

In consistence with the statement of the problem, the

research objectives, and research questions, this study

formulates the following hypothesis.

Ho: There is no significance difference between the mean

targets and mean actual of tax collection in Enugu

state.

H1: There is significant difference between the mean

targets and mean actual of tax collection in Enugu

state.

1.6 AREA OF STUDY

This study covers two big organizations in Enugu state,

Federal Inland Revenue Services Enugu and Enugu State

board of Internal Revenue Enugu.

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1.7 SCOPE OF THE STUDY

A study of this nature ought to be carried out in all the

states of the Federation in Nigeria. However, given the

limitations experienced by the researcher, in form of

inadequate fund to execute the study across all the states,

the study scope was limited to Enugu State. This study

looked at critical appraisal of Nigeria Tax laws as

administered by Enugu State government.

1.8 LIMITATIONS OF THE STUDY

As part of the research experience by the researchers

all over the globe, certain limitations hindered the

effectiveness and smooth collection of data for the work,

these in specific terms include.

1. Inadequate working fund: The funds needed to carry

out this research work is huge sum which cannot be

provided by the student, this posed a great threat to

the accomplishment of this work.

2. Lack of Time: There was no enough time to carry out

this research work, the work was done in line with

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the class work, this made it uneasy to provide the

work at when due.

3. Non challant attitude: This limitation exist when the

researcher visited the organization under study,

some of the respondents felt less concerned about

the questions asked to them, while some refused out

rightly to answer the questions, this contributed to

the slow and steady of this work.

1.9 SIGNIFICANCE OF THE STUDY

The researcher is motivated to critically appraise the

Nigerian tax laws as administered by Enugu state

government with the intention of finding the impact of the

act on the revenue generation in the state, also to introduce

reforms where necessary such that the law shall meet as

much as possible the classical cannons of good taxation,

particularly now that the Nigerian economy calls for self

reliance, self sufficiency inculcation of maintenance culture

and restriction in sourcing external borrowing so as to

manage the national.

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This work therefore shall be of interest to the following

parties.

a. The government and her agencies, federal, state and

local government.

b. Future researchers

c. The general public

It will reveal the lapses or short comings in the tax laws

and other factors inhibiting effective administration of the

law in the state. Whether the tax laws since the

commencement had made any positive impact on the

revenue generated in the state. Its recommendation will

attempt to bring more payment into the tax and for

improved internally generated revenue (IGR).

1.11 PERATIONAL DEFINITION OF KEY TERMS

Tax: The transfer of resources and income from the private

sector to public sector in order to achieve some of the

nation’s economic and social goals.

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Citizen: Person with full rights in a country.

Administration: Performance of executive duties or

execution of public affairs as distinguished from policy-

making.

State: one of the constituent units of nation having a federal

government.

Revenue: The income received by an organization or a state

from taxes.
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REFERENCES

Fufunwa A. B. (2005), “Collapse in Educational System: Our

Collective Failure,” The Guardian, October: 30.

Lambo E. (2005), “Minister decries state of Health System”.

The Guardian, October: 13.

Murkur G. A. (2001), “Design of Tax System and Corruption,”

Conference papers on “Fighting Corruption,
Common Challenges and Shared experiences”
Konerd Adenauer Shifting, and the Institute of
International Affairs (SHA) Singapore: Pp. 1-9,
May 10th -11th.

Nightingale K. (1997), “Taxation: Theory and Practice,”

Untied Kingdom: Pitman.

Obaji C. (2005), “Nigeria cannot justify N40 Billion spend on

Education,” The Punch, October 19.

Ogundale A. E. (1999), “Elements of Taxation,” 1st Edition;

Lagos: Libri service.

Soyode L. and Kojola S. O. (2006), “Taxation: Principles and

practice in Nigeria” 1st Edition., Ibadan: Silicon
Press.
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CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.0 INTRODUCTION

The flow of this chapter lies in the effort made by other

scholars towards appraising Nigerian tax laws, overview of

taxation system in Nigeria, Nature of Tax, Purpose of tax,

Qualities of a good tax system, tax legislations,

constitutional provisions of income tax, burning issues in

Nigeria tax system, the failure of tax administration in

Nigeria, tax law review and amendments, the issue of tax

consultant and task force in assessment and collection of

taxes, the role of judiciary in the interpretation of taxing

statues, the inconsistency in the tax laws.

2.1 OVERVIEW OF TAXATION SYSTEM IN NIGERIA

Nigeria was colonized by the British just like some

other African countries. By an act of the British parliament,

Nigeria became an independent country within the common

wealth in October 1, 1960. In 1963 Nigeria became a

republic within the commonwealth.

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In Nigeria, the taxation system dates back to 1904

when the personal income tax was introduced in Northern

Nigerian before the unification of the country by the colonial

masters. It was later implemented through the Native

Revenue Ordinance to the western and eastern regions in

1917 and 1928, respectively among other amendments in

the 1930s, it was later incorporated into Direct Taxation

Ordinance No of 1940 (Library of Congress, 2008). In

essence, the Nigerian tax system has been based on 1948

British tax laws and has been undergoing a lot of changes.

Since then, different governments have continued to improve

on Nigerian taxation system. A total aspect of the

improvement on the nation’s tax system is the recent

Federal Inland Revenue Service (Establishment) Act, 2007,

Companies Income Tax (Amendment) Act 2007 and the Draft

National Tax policy pending before the National Assembly.

Sanni (2005) noted that a vibrant tax system will have

the following “tripod” tax policy, tax law, and tax

administration. He mentioned that a tax system is

administered through tax policies while the tax laws serve as

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the legal backing. Soyode and Kajola (2006) noted some of

the sources of tax laws in Nigeria to include legislations,

constitution, court judgment and circulars, for example,

Personal Income Tax Act (1993) as amended (in respect of

Pay-As-You-Earn and Direct Taxation: Self Assessment) Is a

typically legislative source of Tax Laws in Nigeria (Sanni

2005:2-5; Soyode and Kajola, 2006: 23 PITA, 1993 as

amended).

2.2 THE NATURE OF TAX

Webster’s dictionary of English Language (India

p.1574) describes tax as a charge imposed by government

authority upon property, individual or transaction to raise

money for public purpose.

In rather appealing language, black law dictionary

describes a tax as a ratable portion of the produce of the

property and labour of individual citizen taken by the state

in the exercise of the sovereign right for the support of

government for administration of the laws and as means to

continue in operation, the various legitimate function of the

 27

state. The first definition seems simple but imperfect

because we have in Nigeria examples of tax imposed

primarily on groups rather than individuals. For instance

section I of the Personal Income Tax Act as amended

contemplates the imposition of tax on communities and

families, even though such is rare in practice. In addition, a

tax may have objectives other than public revenue

generation, then for the second definition though it sounds

vague, it is safe to say tax are charged for various legitimate

functions of the state.

According to Buharri (1993) Tax is a compulsory

contribution from individual and/or business organization

for the purpose of financing government expenditure. He

argued that every country engages in a number of activities

which requires the expenditure of funds and to meet up

these activities, the government raises fund through

taxation. Sharing the same view Hanson (1961:4) stated that

in the early days, tables were imposed to cover the cost of

law and order.

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Olorunleke (1999:7) describes taxation as a way of

making person, individual and corporate entities contribute

money through legalized levies according to their level of

income to a common fund of a state for funning the affair of

the state considering the above so far, it becomes clear that

there are many definitions of tax all have one objective

which is to enable the state to discharge its functions to her

citizens, hence Okpe (1998:1) tried to summarized many of

the different definitions when he said that tax is the transfer

of resources and income from the private sector to the public

sector in order to achieve some of the nations economies

and social goals. He enumerated such goals as education,

public health, transportation, capital formation and

provision of facilities.

Abdulrazaq (2002:36) did not waste time to associate

himself with the above summary definition when he

described the term taxation as a weapon used by any

government to share from the wealth of an individual or

corporate body. Based on the above it becomes necessary to

analyze what is and what is not in order to form opinion.

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Abdulraza (2002:03 said fine and penalty is not tax even

when it is imposed by a tax statute; charge imposed for a

particular service rendered for goods sold is not also a table.

Therefore, it is invariably and enforced contribution of

money, extracted pursuant to legislative authority.

If there is no valid statute by which it is imposed, a

charge is not a tax but once it is backed by written law and

it has other identified characteristics of a tax, it remains a

tax, even if it called other names like toll, tribute, tallague

import duty, customs duty or excise duty etc say the Black

Law Dictionary (1979:130). It therefore settles the term

taxation is forceful imposition and not allowed to be

voluntary.

2.3 PURPOSE OF TAX

Annukwu (2001:15) states that the public sector use

tax to generate more revenue from those endowed with

factors of production which it raises to provide certain

necessary social and economic activities to the citizens, he

outline four purposes as follows:-

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To generate revenue

To allocate resource

To redistribute income and

To stabilize the economy

2.3.1 Revenue Generation

Revenue generation is regarded as the principal

purpose why government impose tax on the citizens. The

revenue is required to cover a widening field of government

expenditure. Hanson (1961:4) stated that in the early days

taxes were impose to cover the cost of administration,

defense and maintenance of law and orders.

2.3.2 Resource Allocation

The argument that taxation performs the function of

resource allocation since tax can alter the product mix

generated within the private sector. For instance, such items

like tobacco, wine, spirit etc are made more expensive by

taxation where as such items like milk, meat, vegetables,

products and merit services are made less expensive

through subsides. The merit goals are considered necessary

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government impose heavy tax to discourage the production

and consumption of the demerit goods, yet receives more

revenue from those insist in their consumption. Therefore,

the high tax imposed increases their cost and reduces the

demand for them.

2.3.3. Income Redistribution

Another purpose of tax is the redistribution of

economic power as increased by income or wealth, Hanson

(1961:4) argued that naturally, economic factors are not

equitably distributed among persons, as such there exist

gap between the more endowed and the less endowed

persons, and hence, there is attendant consequences as a

result of disproportionate inequality in the society. He

concluded that the purpose is to provide more factors

(wealth) for the less endowed ones in the form of provision of

necessary basic amenities.

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2.3.4 Stabilization of the Economy

Here he stresses that tax perform the function of

stabilization writing on the name purpose Okpe (1998:2)

used such expression “to protect infant industries and to

check the consumption of commodities regarded as harmful

to present resources Allocation”. Also “to reduce inequality

of income” for REDISTRIBUTION and “to check inflation” for

STABILIZATION OF THE ECONOMY. Both used the name

/term as to realize revenue to meet the cost of government

expenses. The above shows that there may be various ways

of representation of the purpose of personal income tax but

virtually they have the same meaning.

2.4 QUALITIES OF A GOOD TAX-SYSTEM

Okpe (1998:3) state that principles means rules,

qualities, and conditions that lie behind a particular tax or

tax system.

Amukwu (2001:28) opines that the best quality any tax

system should adopt will be such that will be fair to the tax

payer and still be able to achieve the intended objective of

 33

the government. Hence Adam Smith (1776) set out four

rules of taxation known as the cannons of taxation which

includes:

- Equity

- Certainty

- Economy

- Convenience

2.4.1 Equity

Payment of tax should be according to ones income.

Therefore tax should be progressive. The higher the income

of a taxpayer the higher the tax payable by him. Accordingly,

a tax payer with N150.000 income should pay higher than

another on income of N100, 000 this therefore, makes for

equality among tax payer.

2.4.2 Certainty

The tax payer should not doubt as to the amount of tax

to be paid, where to pay it, the time limit within which the

tax should be paid and the consequences of failure to

comply to the above.

 34

2.4.3 Economy

The tax authority should exercise the greatest economy

in the performance of his duties. That is to say, the cost of

collection should be relatively low. It is uneconomical to

spend the sum of N500.00 to collect N700.00.

2.4.4 Convenience

The time and method of payment of tax should be

convenience for the tax payer. He should be given fair and

reasonable assessment, be allowed enough time to pay and

the tax should be paid at a place accessible to him. The

above cannons have been blended today as most

government use them just as guide and has extend them to

include: flexibility and neutrality.

2.4.5 Flexibility

In the sense, that tax should be easy to charge when

condition and situation change. If government require

additional money urgently, it should be possible to make

changes in the table system to raise the extra money.

 35

2.4.5 Neutrality

A good tax system interferes as little as possible with

the supply and demand of goods and services. It .should not

affect peoples willingness to work or invest.

2.5 TAX LEGISLATION

The history of tax legislation in Nigeria could be traced

as far back as 1904, this was the time when the first tax law

was made which was known as 1904 Land Revenue

Proclamation whose proceed were collected by the Emirs

and shared between them and the government. This was

against the earlier procedure where what was collected was

used in maintaining the Emirate. From this new Law the

Emirs portion of the tax was for the Emirate, Government

portion was used in running the government of the whole

country.

Lord Lugard Later in 1906 introduced another law

called the 1906 Native Revenue Proclamation which replaced

the 1904 Land Revenue which replaced the 1904 Land

 36

Revenue Proclamation. The law aimed at unifying all the

existing forms of taxation then.

In 1917, the 1917 Native Revenue Ordinance was

introduced and replaced the 1906 proclamation. The law

regulated the imposition and collection of taxes from the

natives. This ordinance was extended to both the Northern

and Southern parth of the country, but was grudgingly

accepted in the south, because there was no recognized

traditional ruler and the non acceptance of the white-men in

the Eastern and Delta areas of the South. There were

attempts to execute this ordinance in a careful and peaceful

manner but they always met resistance, notably in owerri,

Aba and Calabar. However, after the amendment of the 1917

Native Revenue Ordinance, Lugard succeeded in extending it

to eastern province in 1929.

First in the western province, the Oba of Benin was the

first of the southern rulers to accept direct tax in 1917. it

was later introduced in the Yoruba area duly enacted to

apply to the eastern province including Warri and Asaba

division to take effect from 1st April, 1928.

 37

The introduction of Direct tax was rejected in various

parts of the South. It sparked of disturbance in Warri

province. (Where there was physical opposition to

assessment, census) and Kwara areas of Old Northern

Region. However, collection of taxes went on smoothly

beyond all expectation apart from minor incidents in

Onitsha and Ogoja, Izzi in Abakaliki division bluntly refused

to pay and meetings held to resolve the issue were broken

up by the women (Ndu 1987:158).

Up to today, investigation reveals that the people of

Ezza and Izzi still resist tax and would do anything possible

to make sure they did not pay tax within their locality. It has

always been a horrible experience for the officials to clash

with them. The strongest and most organized resistance was

in Aba in owerri province where the women registered their

protest against the government taxing them. This is known

as the Aba women root of 1929 where about 31 lives were

lost and more than 300 wounded (commission of inquiry

1930:81):
 38

The commission identified the cause of the riot to

include:

a. Frustration of women in a period of economic

depression. At that time the price of palm oil the

main stay of the economy was falling, while the

newly imposed custom duties had escalated.

b. The crude and indiscriminate manner, women,

children and livestock were counted in 1929 tax

census.

In 1937 both the native direct taxation (colony)

ordinance and the non native income tax protectorate

ordinance were passed. These ordinance initiated

discrimination in direct taxation between native and non-

natives, these were later replaced by the direct taxation

ordinance of 1940, empowered native authorities to tax

Africans in their areas of jurisdictions, while the income tax

ordinance of 1943 governed the taxation of non-Africans and

companies. These ordinances were the formation of our

modern Nigerian taxation. According to Ola (1981:9) the

legal history of personal income tax in Nigeria may be traced

 39

back to the enactment of direct taxation ordinance of 1940,

under the direct taxation ordinance, rates of taxes and the

form of computing them varied from one local administered

and seriously lacked uniformity by levying tax on income of

Africans in the former regions. While they taxed the income

of both Africans and Europeans in Federal Capital Territory

of Lagos. This the Europeans in the former region were not

subjected to tax in the regions in which they were resident.

Cocoa farmers were hardly taxed at all and this has been

suggested as the cause of the wealth of the people leaving in

the areas where coca was grown. Known incomes of Africans

those days were comparatively small, and revenue must of

necessity be small. Taxation policy then appears to be based

on a choice between bureaucracy (tax administration by

officials and the democratization of tax system). (The

introduction of politicians as representation into the tax

system) the former was preferred and practiced.

Between 1953-1956, there was no substantial change

in the tax law except up dating the tax rates. In early 1950,

there involved a Federal System of government and the

 40

income tax ordinance of 1943 was retained as a federal

mater, which governed the taxation of Africans in the

different regions. Each of the three regions was empowered

to pass laws for the taxation at African resident in them.

In 1956, the Eastern Region Introduced the Direct

Taxation Ordinance with Finance Law I of 1956, in the

Western Region, Income Tax Law No 16 was introduced in

1957 while the Northern Region retained the 1940 taxation

ordinance. These became the First Indigenous Tax Laws to

be enacted it is interesting to note that the eastern region

which was the last to accept any form of taxation in Nigeria

was the first to introduce a comprehensive regional finance

law that served as a model to other regions. The finance law

brought PAYE system of tax collection into operation

(Njokama 1975:11). It is remarkable to note that under the

Eastern and Western Tax Law the tax payable by persons in

the same category were generally higher in the East than of

the North. The inconsistencies and confusion resulted in the

setting up of Raisman Fiscal Commission of 1958.

 41

The commission recommended that there should be a

uniform basic principle for taxing income throughout

Nigeria. This recommendation was embodied in the Nigerian

constitution of 1960, which resulted eventually in the

enactment of the income tax management Act of 1961.

(ITMA 1961). ITMA 1961 was the precursor to (CITA 1961,

1979 and 1990). The order in council brought non African

within the regional tax set up.

The main provision of the act relate to:-

a. The basis for computing income of individuals,

families Estate and trust.

b. The determination of residence.

c. The treatment of prudent/pension funds.

d. Capital allowances for building, plants and

machinery used in producing income.

e. The types of expenses which are allowed or not

allowed for income tax purposes.

f. The treatment of leases incurred in a trade, business

profession or vocation.

g. Income which are exempted from tax.

 42

To complete the Act, Eastern Nigerian passed finance

law 1962, this will fill in gaps in the Act particularly those

aspect for which the federal legislature could not legislate for

example:

a. Assessment and appeal machinery.

b. The machinery for collection and,

c. The tax rate.

The law, although was passed in 1962 was made

retrospective from 1st April, 1961 to agree with the

management Act. So also all other regional tax laws had to

be amended to conform with the federal laws. (Olorunke

1985:12). It was the management Act that gave rise to

personal income tax decree 104 of 1993. The management

Act underwent series of amendments by way of decrees in

1975, 1985, 1987, 1990 and 1992 (Abdullrazag 2002: 3).

In 1993, the management Act transformed into

personal income tax decree 104 of 1993 (now Act) which is

the main subject of this work. The Act abrogates the

management Act as amended. The main provisions of the

Act were for the taxation of individuals, corporate sole, or

 43

body of individuals. For instance partnership are deemed to

be resident for that year in relevant state and increased the

table of rates for the taxation of individuals under (PITA).

The Act has also undergone some amendments in 1997 and

1998. These amendments centered on, enhanced personal

relief to individual tax payers and the amendments to oust

the controversial duties carried out by some tax consultant

termed “Tax contractor” by the same tax Board.

2.5.1 Other Tax Laws

There were other tax laws that featured a wide and

missed range which various governments seeks do change

and collect revenue for public expenditure they includes:

Company Income Tax Act.

Education Tax Act

Industrial Development (Income Tax Act)

Mineral and Mine Act

Capital Gain Tax Act

Value Added Tax

Sales tax Law

 44

Stamp Duties Act

Customs and Excise Management Act

Capital Transfer Tax Act (non Abolished)

i. The company income tax act (CITA)

section 8 of (CITA) 1980 as amendment charge to base

at the rate 30% in each year assessment of the profit of any

company accruing in, derived from, brought into or received

in Nigeria. The act treated such items as categories of

chargeable income, trade profit, investment income,

expected income, deducted expenses, basis of Assessment,

treatment of losses and capital Allowance.

ii. Education Tax Act 1993

This was introduced in Nigeria on 1st January, 1993 to

raise revenue to provide direct funding for certain aspect of

primary, secondary, and higher education at federal, state

and Local Government level in the county. The base of the

tax is the Assessable profit of a company registered in

Nigeria. The tax Rate is 2%.

 45

iii. Value Added Tax Act 1993.

Under the above, all purchasers of chargeable goods

and services are expected to pay 5% of the purchase price as

tax. It is a federal statute, and is administered, by the

federal Inland Revenue Services on behalf of the Federal,

State and Local Governments. The proceeds are shared

among the three tiers of Government in accordance, with a

formular determined from time to time by the federal

legislature.

iv. Sales Tax Law 2000

There is sales tax, which is provided for in the statute

books of many states. The sales tax was presumed dead at

the Advent of VAT ACT but Lagos state recently resuscitated

the sales tax law and showed an intention to commence the

collection of the tax. This aroused the interesting issue of

which government has the constitutional authority to tax

sales transaction within a state.

v. Custom and Excise Management Act 1990

This governs the custom duty payable by importers of

specific goods. This tax is charged solely by the Federal

 46

Government and Collected through the Nigerian custom

services. Excise duty was levied on variety of local produced

goods until 1998 when the tax was abolished. It was

however, partially reintroduced with effect from January 1,

1990.

iv. Capital Gain Tax Act (Decree) 1967

The Act charge tax to any capital gain accruing to

individual and corporate bodies whenever they dispose

asset. The Federal Government has exclusive authority to

charge capital gain tax but the collection has been partially

delegated to the state while the corporate bodies pay capital

gain tax to the federal Inland Revenue Services, others pay

to the tax authority in their state of residence.

vii. Capital Transfer Tax

The imposed inheritance tax was scrapped in 1996.

viii. Stamp Duty Act 1990

The Act imposed tax on a wide range of documents and

transaction, corporate bodies pays to the Federal Inland

Revenue Services while individuals pay to state tax

authorities.
 47

Most of these Acts have undergone several

amendments but still the tax laws in the country have a lot

to bear to those introduced by the colonial masters. The

amendments in them have not charged their colonial

structures.

2.6 ADMINISTRATION OF TAX IN NIGERIA

The income tax management Act 1961, succeeded in

unifying the various regional tax laws in Nigeria, each state

is responsible for taxation of people resident in that state.

This is done by the state Board of Internal Revenue. This

however does not apply to those in the employ of the Armed

forces, Air force, Navy, Police Force, Nigeria custom services,

immigration e.t.c and other persons resident in Abuja which

are in the special provision Decree (New Act) 1977 and the

Company Tax Act (CTA) 1969 which fall under Jurisdiction

of Federal Inland Revenue Services (FIRS).

The national body responsible for the administration of

Tax is the joint tax Board (JTB) section 85 of the Act 1993

makes provision for the setting up of Joint Tax Board, while

 48

responsibility is to see the taxation of income of persons

other than corporate bodies throughout the country.

2.6.1 The Joint Tax Board

As already stated is established by the personal income

Tax Act 1993 as amended to see the taxation of income of

persons other than corporate bodies throughout the

country.

2.6.2 Composition/Membership of J.T.B

1. The chairman of the Federal Board of Inland Revenue

who shall be the chairman of the J.T.B.

2. One member from each state of the Federation (who

must be experienced in income tax matters) to be

nominated either by name or office from time to time

by the commissioner of the state in charge of income

tax matters.

3. The secretary to be appointed by the federal public

service commission, who is a civil servant and not a

member of the board is responsible for maintaining

 49

records of boards proceedings and for signing all

decisions of the Board.

4. The legal Adviser to the Federal Board of Inland

Revenue shall be in attendance at the meetings of the

board and services as an adviser to the Board. Any

seven members shall constitute a quorum.

POWERS AND DUTIES OF THE JOINT TAX BOARD

1. The Board shall exercise the powers and duties

conferred upon it by any express provision of the

PITA and any powers and duties arising under the

act which may be agreed by the Government of each

territory to be exercised by the board.

2. The Board shall exercise any powers and duties

conferred on it by the enactment of the Federal

Government imposing tax on the income or profits of

companies, or which may be agreed the Federal

Minister of Finance to be exercised by it under such

enactment.
 50

3. The board shall advice the Government of the

Federation in respect of double taxation

arrangement concluded or under consideration with

any other country and in respect of capital

allowance and other taxation maters having effect

through out Nigeria.

4. The Board shall use its best endeavours to promote

uniformity both in the application of the PITA and in

the incidence of tax on individuals through out

Nigeria.

2.6.3 State Board of Internal Revenue

Section 85A of the PITA provides for the establishment

of a State Board of Internal Revenue to be known as “The

state service” to comprise of:

1. The executive head of the state board as chairman

who shall be a person experienced in taxation and

appointed by governor of the state from within the

state service.
 51

2. Three other members to be nominated on their

personal merit by the commissioner in the state

responsible for finance.

3. The directors and heads of departments within the

state service.

4. A director from the state ministry of finance

Any five members, of whom one shall be the chairman

may form a quorum. The board may appoint anyone from

the within the service to be secretary to the Board.

The legal Adviser to the state Board, may represent the

Board in his professional capacity in any proceedings in

which the state may be party.

The responsibilities of the State Board

By section 85B, the state board shall be responsible for;

1. Ensuring the effective and optimum collection of all

taxes and penalties due to the government under the

relevant laws.
 52

2. Doing all such things as may be deemed necessary

and expedient for the assessment and collection of

taxes and shall account for the amounts collected in

the prescribed manner to the state commissioner for

finance.

3. Making recommendations, as is appropriate to the

J.T.B on tax policy, tax reform, tax legislation, tax

relief’s, treaties and exemption from tax as may be

required from time to time.

4. Generally, controlling the management of the service

on matters of policy subject to the provisions of the

law setting up the state Board.

5. Appointing, promoting, transferring and imposing

discipline on employees of the state service.

The Board may, by notice in the Gazette or in writing,

authorize any person to:

a. Perform or exercise on behalf of the state Board, any

function, duty or power conferred on the state

Board.
 53

b. Receive any notice or other document to be given or

delivered to it or in consequence of the Act and any

subsidiary legislation made under it.

2.6.4 Local Government Revenue Committee

Section 85E provides for the establishment of a Local

Government Revenue Committee to be comprised of:

1. The Supervisory Councilor for Finance as Chairman.

2. Three Local Government Councilors as members

and

3. Two other members experienced in revenue matters

to be nominated by the chairman of the Local

Government on their personal merit.

2.6.5 Joint State Revenue Committee

Section 85F of the Act introduced by the finance

(Miscellaneous Taxation Provisions) (No2) Decree 1998

provides for the establishment for each state of the

Federation, a Joint State Revenue Committee which shall

comprise:-
 54

1. The Chairman of the state internal revenue as the

Chairman

2. The Chairman of the Local Government Revenue

Committee.

3. A representative of the Bureau on Local Government

Affairs not below the rank of a Director.

4. A representative of the Revenue Mobilization Allocation

and Fiscal Commission as an observer.

5. The State Sector commander of the Federal Road

Safety Commission as an observer.

6. The Legal Adviser of the State Internal Revenue Service

7. The Secretary of the Committee who shall be a staff of

the State Internal Revenue Service.

2.7 ADMINISTRATION OF TAX BY ENUGU STATE

GOVERNMENT

Tax administration in Enugu State is being managed

by Enugu State Board of Internal Revenue, Main Office

Situated in Enugu. It was established to administer income

 55

tax in Enugu State just as they are in other States of the

Federation.

Income tax was first introduced in Nigeria in 1904 by

Late Lord Luggard. The Introduction of Native Revenue

ordinance of 1927 was most difficult in the Eastern areas of

the country, due mainly to absence of recognized central

Authority, resistance to this form of direct taxation in such

that it leave to riots notably in Calabar, Owerri and Famous

Aba women riot of 1929 which was severe, and that

attracted a probe. Besides the Native Revenue ordinance

were also Native Direct taxation ordinance for the Colony

and native income tax ordinance.

These ordinances were later modified and incorporated

into the direct taxation ordinance No 29 of 1940 Cap 54 and

the income tax ordinance No 29 of 1943 respectively. The

direct taxation ordinance of 1940 empowered native

authorities to tax Africans in their areas of Jurisdiction

while the income tax ordinance 1943 was for tax of Non-

Africans in companies. The two ordinances were the

foundation of our modern taxation which necessitated

establishment of Board of internal Revenue in each of states

 56

of the federation which Enugu State board of internal

Revenue in one of them.

Enugu State Board of Internal Revenue has branches

and units spread across the 17 Local Government areas and

major towns respectively. Tax according to response gotten

under this study through tax officials is well managed

through the pay-Direct platform.

Furthermore, the response reveals the following:

That Enugu State has no State tax Law but uses

personal income tax Act (PITA) as amended 2011.

That the board achieves its objectives despite Tax

evasion/Avoidance of tax payers through aggressive

persuasion.

That the board has adopted the use of on line

assessment and payment method of tax administration

That penalties for defaulting to pay tax is interest at

bank lending rate or 10% of the amount due.

That Enugu State does not contract to organization the

assessment and collection of tax, but uses pay Direct

assessment and collection

 57

ADMINISTRATIVE STRUCTURE OF THE BOARD OF INTERNAL

REVENUE

RTA

AA

ADMINISTRATION
COLLECTION
ASSESSMENT

TAX COLLECTORS

PROSECUTION / PAYEE LEDGER

BAILIFF PURCHASE TAX

FINANCE TYPIST MESSENGER DRIVER SECURIT

PAYEE INVESTIGATOR TAX OFFICERS CONFIDENTIAL

ASSESSMENT RECORD

THE RELEVANT TAX AUTHORITY (RTA)

The authority is Enugu State Board of Internal Revenue

 58

THE ASSESSMENT AUTHORITY

The Assessment Officer is the head of the Board of

Internal Revenue in the state.

He is appointed to head the board by the execution

governor of the State. He is responsible for the assessment

of tax and its collection and as well as accounting for it. He

carries out the duty with the help of collection, Assessment

and Administrative officers. He is directly in charge of

assessment and administration. He has the power to issue

notice to taxpayers to deliver statements of incomes or to

finish further returns.

Where there is suspected doubts as to genuineness of

returns, he might ask the taxpayer to produce before

assessment Authority books and documents of the tax paid

cowered by pay as you earn (PAVE).

The collection, Administration and assessment is the

various departments under the assessment authority.

Tax collectors, prosecution and payee Lager Offices are

subunits under the collection department.

 59

Finance, Typist, Messenger, Drivers, and Security

subunits are under Administrative department.

Payee Assessment, Investigation, Tax Officers and

Confidential records units are under assessment

department.

From this, the researcher equally observed that the

board is a system, which is a recognizable whole made up of

Component parts i.e. (Sub systems or Units) which are

interdependent and work together to achieve a common
objective
 60

TABLE 2.1
Year 2000 Year 2001 Year 2002 Year 2003 Year 2004 Year 2005
S/N TYPE OF REVENUE TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL
1. PAYE (CASH) 183,924,000 208,363,197 470,149,813.34 452,000,000 452,000,000 449,082,096.81 460,000,000 476,577,069.65 480,000,000 565,847,227.43 600,000,000 1,030,673,644.74
2. PAYE (A.V) 14,040,000 67,546,320 121,160,801.03 116,000,000 116,000,000 119,235,878.65 125,000,000 123,660,54766 130,000,000 160,306,904.74 200,000,000 152,404,218.25
3. DIRECT ASSESS 47,268,000 80,826,189 17,954,220.33 56,500,000 56,500,000 14,962,156.23 50,000,000 12,251 38046 50,000,000 11,441,246.05 130,000,000 19,202,935.55
4. TAX AGENT DEBIT 1,404,000 690,757 1,306 588 5000,000 5000,000 1,194,800 5000,000 1,581 57721 5,000,000 814,740.00 16,500,000 311,815.04
5. PENDLITIES 2,808,000 7,330,592 19 584 - - 19.107 10,000,000 24,640 15,000,000 37,080,00 10,000,000 66,160
6. WITHHOLDING TAX 204,516,000 76,785,404 138,706,382.37 187,000,000 187,000,000 135,949,317.37 200,000,000 116,562,519.05 155,000,000 102,447,025.15 220,000,000 124,962,160.63
7. MORTUARY LEVY 327600 172 092 489 976 555,000,000 555,000,000 19,950 50,000 303,880 800,000 277,160.00 500,000 204,792
8. EDUCAT. DEN. LEVY 1,404 000 1612,350 2,181,551 10,000,000 10,000,000 3,226, 974.95 10,000,00 968,190 20,000,000 963,440.00 3,500,000 1,070,551
9. CAPITAL GAINS TAX 7 488,000 - - 10e 10e - 1000 - 1000 - 15,000,000 1,928 750
10. APPEAL TAX 936,000 - - 10e 10e - 1000 - 1000 - 10 -
11. 5% CONTRACT JOBS - - - - - - - - 70,000,000 - 80,000,00 -
DEDUCTION FROM MINI.
12. INFRAS. DEV. LEVY - - - - - - 1000 - 1000 - 10e -
13. IDENT. OF MOTOR VEH 7,938,000 4,505,450 6,329, 620 16,050,000 16,050,000 8,122 400 101,000,000 17,775,100 16,400,000 22,094,610.00 18,000,000 20,348 245
14. MOTOR VEH. LIC 17, 922,000 9,753,433 12,173 530 30,000,000 30,000,000 15,258,010 20,000,000 34, 806,565 30,500,000 37,182,630.00 40,000,000 41,884,413
15. MOTOR DRIVERS LIC 8,160,000 6,431 650 21,700,000 8,160,000 21,700,000 19,569,850 25,000,000 29,490,350 26,500,000 16,603,470.00 25,000,000 25,262,347
16. ROAD TRAFFICE EXAM 2,430,000 1 370 950 1, 978 640 2,500,000 2,500, 000 2,436 430 3,000,000 2,577,110 2700,000 3,184,390.00 2,000,000 3449 190
17. SALES OF BADGES 30,000 17 200 27 500 30,000,000 30,000,000 390 610 150,000 775,040 941 400 151,200.00 800,000 126 940
18. TRADING A/C - - 4,500,000 - - 6,708,000 7,000,000 7,511 865 7,060,000 65,920.00 7,600,000 13 100
TOTAL 500,595,600 465,405,584 7,986,78,205.6 1,466,8,210,000 1,465,702,000 7,76175580.9 1,016,203,000 8,248,658,33.9 1,009,904,400 9,214,172,23.3 1,368,900,000 3,579,230

SOURCE: ENUGU STATE BOARD OF INTERNAL REVENUE.

ANALYSIS
The researcher observed from the table above that the Board/organization was not able
to meet up with its targets. Except in years 2001 and 2005 where they proved so by achieving
more than its targeted revenue from taxes.
 61

Table 2.2: Enugu State Board of Internal Revenue actual IGR collection 2006-2010
YEAR 2006 YEAR 2007 YEAR 2008 YEAR 2009 YEAR 2010
S/N TYPE OF REVENUE ACTUAL COLLECTION ACTUAL ACTUAL ACTUAL ACTUAL
COLLECTION COLLECTION COLLECTION COLLECTION
1. PAYE-CASH(Current/Arrears) 1,871,240.54 948,741,898.31 1,819,964,544.00 2,598,675,632.25 2,086,517,572.00
2. PAYE-A.V 118,719,322.10 172,540,582.56 210,719,091.90 198,729,122.70 244,540,769.00
3. DIRECT ASSESSMENT 14,058,394.15 50,269,684.69 140,290,537.86 190.604 977.38 78 894 222.00
4. TAX AGENT DEBT DIRECT RURAL TAX 422,650.00 20,338,428.34 70,654,448.00 1,642,326.00 22,555 183.00
5. PENALITIES 23,898.60 17110.00 50,042,060.00 25,769,130.00 45,320.312.00
6. WITHHODING TAX 163,613,415.80 236,578,820.88 273,454,676.35 267,893,765.50 749,138,278.00
7. MORTUARY LEVY 118,710.00 23,746.00 1,282,800.00 92.630.00 249,982.00
8. DEVELOPMENT 1,307,800.00 733,400.00 6,801,480.00 1,139,100.00 41,064,505.00
9. CAPITAL GAINS TAX 923,200.00 319 825.00 33 149 265.00 13,087,625.00 23 740,400.00
SUB TOTAL PERSONAL INCOME TAX 2,170,718,631.19 1,429,563,495.78 2,606,358,903.11 3,297,634,308.83 3,292,021,223.00
10 IDENTIFICATION OF MOTOR VEHICLE 11,556,527.00 10,127,718.00 12, 019,445.00 15116,925.00 18,092,385.00
11 VEHICLE LICENSE 34,141,882.00 57,103,912.00 59,337,539.00 126,264 050.00 128,695,412.00
12 MOTOR DRIVERS’ LICENSE 21,925,850.00 7,398,940.00 7,463,790.00 18,146,600.00 17,521, 135.00
13 ROAD TRAFFIC EXAM 1,906,442.00 1,709 250.00 1,948,885.00 4,373,950.00 9,131,750.00
14 SALE OF BADGES 190,902.00 150,775.00 200,000.00 4,501,000.00 5,032,860.00
15 TRADING ACCOUNT MOTOR PLATES 297,500.00 430,000.00 650,000.00 18,000,000.00 15,000.000.00
SUB TOTAL MOTOR VEHICILE AD 70,019,103.00 76,920,595.00 81,619 659.00 186,402,525.00 193,473,542.00
TOTAL ALL TAXES 2,240,737,734.19 1,506,484,090.78 2,687,978,562.11 3,484,036,833.83 3,485,494,765.00
16 MINSTRIES & DEPTS 473,123,488.00 1,271,906,711.22 307,136,046.01 958,367 456.00 1,402,644,358.47
17 OTHER PARASTATAIS - 2,753,090,802.00 3,504,885,391.88 3,870,576,166,17 3,228,620,137.07
GRAND TOTAL 1,544,220,335 5,608,402,199 4,017,775,908 8,499,382,981 8,310,232,800
SOURCE: ENUGU STATE OF INTERNAL REVENUE, ENUGU
ANALYSIS
The researcher observed from the table above that there is no targeted amount of
revenue given. But the board’s effort could be assessed through how much that was generated
in previous year and compared it with preceding year. It could be viewed that there is
improvement in revenue generation from the years-2006, 2007, 2008, and 2009. However, in
the year 2010 there is a fell.
 62

2.10 USE OF CONSULTANTS IN TAX ADMINISTRATION

Olorueke (1994:8) observed that with the post years

that some states tried to show they were more aggressive in

the tax collection drive then, others and as such changed

the normal tax operation to a military assisted operation

against the will of the law and against the express directive

of the federal government, the custodian of the tax laws. The

states know they were offending the law but because the

system produced more revenue increased, it was not cost

effective because of the exorbitant commission they charged

(15%-25%) of the tax collected.

The use of consultant according to Neiyeju (1998:19) it

is not answer to revenue mobilization in many cases appeals

were short circuited and quick Judgment were obtained

from the state courts and implementation was enforced

through closure of business premises and offices. Appeal

process were ignored and in some cases did not exist,

contrary to the provision of the state tax laws. The argument

concerning the legality of using the tax consultant was

partially solved with the enactment of section 85A-E of

 63

personal income tax Act 1993 which provides for the

establishment of state Board of internal Revenue as Tax

Authority of a state. In reaction to tax assessment and

collection, the Joint Tax Board issued policies statements

that consultants can only be used for secondary and for

supportive assignment to tax authority. Such areas can be

data collection, tax information, feasibility studies, training,

computerization, monitoring etc which the primary function

of assessment, collection and accounting be left to the tax

authority.

2.11 THE ROLE OF THE JUDICIARY

Because, tax laws is entirely statutory, tax disputes

always raise the issue of statutory interpretation. As a rule

tax, statutes are interpreted, very strictly. There is no

common law in taxation, therefore, no general principle of

law can displace the true meaning and effect of a statutes

which has been validly passed. The link between the

charging provision and the intended tax payers must be

direct not inferential. This was maintained in Authority V

 64

Regional Tax Board (1967 NCLR 452) clearly, in cape

Branding Syndicate VIRC (1921:2KB) Rawlatt presented a

summary of the duties of a judge in tax adjudication by

declaring that in taxing Act one has to look merely at what is

clearly said, that there is no room for any intendment there

is no equity about tax, there is no presumption as to tax,

nothing is to be read in, nothing to be implied, one has to

look fairly at the language used. However, Bello (1977: in

CLe) I deviated from the above principles when said that in

construing a statute, that regard shall be given to the cause

and necessity of the Act and then such construction shall be

put upon it as would promote its purpose and arrest the

mischief which it is intended to deter.

The above attitude could be seen as an indication that

Nigerian Judiciary do not give attention to the peculiarities

of taxing statutes, as was demonstrated in Shell Petroleum

Development Company (Nigeria) Limited V B.I.R where the

same supreme court, not only applied equity consideration

but gave administrative directions overriding effect in the

interpretation of tax statute. This was carried to an absurd

 65

level by the court of appeal in the case of Phoenix Motors

Limited V NPFMB (1993: INWLR.718 at 731) the court

declared that if a statute is revenue based, the provision

therefore must be construct liberally in favour of revenue or

deriving revenue by government unless there is a clear

provision to the contrary.

The above is sufficient bearing that there is no settled

approach to interpretation of taxing statutes in Nigeria. It is

also an indication that Nigerian Judges have not developed

sufficient expertise in the field of tax adjudication

Abudullrazag (2002: 21) suggested that the high court be

split into division so that judges will have the opportunity to

specialize. Those in tax division would have no excuse for

not keeping abreast the applicable principle and current

development in the field.

The universal rule that can be applied in Nigeria courts

is that the belief and assumption of those who frame a

statute cannot make the law. The onus therefore is on the

legislature to ensure that tax is expressly imposed upon the

 66

subject. Where this has not been done, the responses of the

court should then depend on the factual station before it.

2.10 FAILURE OF TAX ADMINISTRATION

Various authors and tax practitioners and

administrators have in many ways expressed their opinions

that tax administration in Nigeria is a failure and have

called for review of the existing tax laws.

Adekanola (1997:5) maintains that the bulk of personal

income tax yield come from employees whose salaries are

deducted at source, where as the self employed who make

the most money manage to avoid tax as a result of

inadequate monitoring, hence, tax is inequitable. He further

observed that the language of the legislation is often

forbidding and confusing even to the professionals, and

therefore fails the test of certainty. This is because where the

tax payers have no knowledge of the rules under which they

pay tax, the range of deductible expenses and allowance

available to them they will not be at ease to disclose their

taxable income. He concluded that the hallmark of tax

convenience in Nigeria now is the ability of a tax payer to go

 67

to tax office, say what he is ready to pay, be assessed

accordingly, pay and obtain a tax clearance certificate.

In addition, he enumerated some of the factors which

have made tax administration to fail in Nigeria as follows:-

• Low level literacy.

• Unpopular culture of record keeping.

• Insufficient tax officials to cover the field.

• Under training, ill equipped, badly remunerated and

corruption of the part of the officials.

• Corrupt and selfish lot on the part of government who

divert the tax paid into their private pocket and not in

public utilities.

He however, formulated solutions which included:-

The importance of communication and dialogue

between government and citizens in matters relating to

taxation. Still on neglect of tax officials, Taylor (1970:531)

has this to say, “Characteristically, however, government

show no general tendency to establish priority for tax

administrators even when they are confronted with hard

facts that employment of an additional tax inspector will

result in an increase in tax collection of as much as twenty

times his salary.

 68

REFERENCES

Abudulraxaq (2002), “The Nigeria Tax Guide and statue”

Journal of chartered institute of Taxation Vol 8 No 7
Pp 35-36 October.

Adekanola S. (1997), “Approach to Better Taxation Revenue”

Business Times Newspapers, Lagos: Daily Times of
Nigeria Plc.

Annukuw A. (2001), “An Appraised of Personal income Tax

as a source of Revenue” to Enuge State, The Daily
Independent, April 30.

Black Law (1979), “Black Law Dictionary”, 5th Edition,

Minnosota: West Publishing Co. Pp 1307.

Buhari U. (1993), “The Justification for taxation” the Dumont

Institute for Public Policy Research, Vol 12 No3 Pp
13-7, November.

Federal Republic of Nigeria (1979). “The Constitution of

Federal Republic of Nigeria,” Lagos: Government
Press.

Federal Republic of Nigeria (1999). “The Constriction of

Federal Republic of Nigeria” Section 251 (B), Abuja:
Government Press.
 69

Hanson J.I (1964), “A textbook of Economics” 3rd Edition

Kondon: Kogan Press.

Naiyeju J.K (1998), “Adopting Modern Management

Techniques to Tax System”, Business Times
Newspapers, Lagos: Daily Times of Nigeria PLC.

Ndu C.N. (1987), “An Appraisal of fiscal efficiency of the

Nigerian personal income Tax system,” 1st Edition,
Enugu: His Grace Press.

New Websters (1989), “Dictionary of English Language”

college Edition, India: subject publication PP 157.

Njokama C. (1975), “Income Tax Law Practice in Eastern

Nigeria,” Aba: Lynaco International Press Ltd.

Okpe 1.1 (1998), “Personal income Tax,” 1st Edition; Enugu:

New Generation books.

Ola C.S. (1981), “Income Tax Law for Corporate and

Unincorporated Bodies in Nigeria,” Ibadan: Heinemann
Educational books Ltd.

Olerunleke (1999), “Taxation in Nigeria, Tread and ways

forward a consultant perspective” the Nigeria taxation
Lagos Chattered institute of Taxation Vol 4 No 6 Pp 7.
 70

Olornuke D.O. (1985), “Taxation in Nigeria, Prospects for

Reform,” Business frames Newspapers, Lagos Daily
Times of Nigeria PLC.

Sanni A. (2005), “Contentious issues in Tax Administration

and policy in Nigeria” A paper presentation at the 1st
National Retreat on Taxation: June 30.

Soyode L. and Kajola S.O (2006), “Taxation: principles and

practice in Nigeria” 1st Edition, Ibadan: Silicon press.
 71

CHAPTER THREE

3.0 RESEARCH DESIGN AND METHOLOGY

This chapter presents the method the researcher

adopted in carrying out this research. It gives full details on

the research design, areas of study, sources of data,

instruments for data collection, method specification and

method of data analysis.

3.1 RESEARCH DESIGN

Basically, this study is an Econometrics research and

includes the use of time series data. According to Gujarati

(2003:43), Econometric research has to do with measuring

parameters of economic relationship and making forecasts

or predictions of values of such variables.

Time series data on Enugu State Board of internal

Revenue Target and Actual Revenue collection from 2000-

2010 will be used in order to critically appraise Nigerian Tax

laws as administered by Enguu State Government.

 72

3.2 AREA OF STUDY

This study seeks to highlight the critical appraisal of

Nigerian Tax Laws as administration by Enugu State
Government. Therefore, Enugu State is the focal point in
this research.

3.3 SOURCES OF DATA

Data needed for this study is secondary data which

was gathered from Journals, publications of the Enugu

State board of internal revenue.

3.4 INSTRUMENT FOR DATA COLLECTION

Specifically, this study involves the use of time series

data which is non-experimental in nature and data is got
from Enugu State board of internal revenue, these are some
economic and social indices necessary in the critical
appraisal of Nigerian Tax Laws as administered by Enugu
State Government.

SPECIFICATION OF MODELS
Z – test tools are used are an evaluation model.
Two sample Z-test is used for 2000-2005 while as one
sample Z-test is used for 2006-2010 to analyze the data.
Formula for two sample Z-test:
 73

Z = X1 – X2 = do
δ12 + δ22
n1 n2

Where X1 = Mean of sample 1

X2 = Mean of sample 2
do = Hypothesized difference between the
population means
δ21 = Variance of sample1
δ22 = Variance of samples 2
n1 = Size of sample 1
n2 = Size of sample 2
α = 0.05 Level of significance

The formula for one sample Z-test is

Z = X-µo
δ n
Where
X = Sample mean
Uo = Hypothesized population mean
δ = Population standard deviation
n = Sample size

3.6 METHOD OF DATA ANALYSIS

The analysis of the stated model was carried out using
various statistical data Z – test and variance was used to
analysis the data in Judging Enugu State Board of Internal
Revenue Target and Actual Revenue collection from 2000-
2010.
 74

REFERENCES

Okeke .A.O. (2001), “Foundation statistics for Business

Decision,” Enugu: Macro Academic Publishers.

Obi .F. (2006), “Research methods in Management,” Port

Harcourt: Pearl Publishers.
 75

CHAPTER FOUR

4.0 PRESENTATION, ANALYSIS AND INTERPRETATION

OF DATA
This chapter aims at presenting, analyzing and
interpreting the results collected from Enugu state Board of
internal Revenue Enugu, between years 2000-2010 in order
to critically appraise the Nigeria Tax Laws as administered
by Enugu state Government.

4.1 DATA EVALUATION TECHNIQUE

Statistical and Z-test tools are used as evaluation
technique. The critical value is determined based on a table
of Z-values, which determines the critical value based on the
selected level of confidence. The computed Z is compared to
the critical value to determine if the difference is significant.
Two sample test or two sample Z-test is used for years
2000-2005 while as, one sample Z-test is used for years
2006-2010 to analyze the data.
The formular for two sample Z-test is:
- -
Z = X1 – X2 – do

δ12 + δ22
n1 n2
 76

-
Where X1 = Mean of sample 1
-
X2 = Mean of sample 2

do = Hypothesized difference between the

Population means

δ12 = Variance of sample 1

δ22 = Variance of sample 2

n1 = Size of sample 1

n2 = Size of sample 2

α = 0.05 level significance

The formular for one sample Z-test is:

-
Z = X - µo
δ/ n

Where
-
X = Sample mean
µo = Hypothesized population mean
δ = Population standard deviation
n = Sample size
 77

4.2 STATEMENT OF THE HYPOTHESIS

The research hypothesis formed for the purpose of this

study are:

Ho: There is no significance difference between mean

targets and mean actual of tax collection in state.

H1: There is significant difference between the mean and

mean actual of tax collection in Enugu state.

Ho: The decision rule is to reject the null hypothesis and

accept alternate hypothesis (H1).

Using the formular Year 2000

Z = X1 – X2 - do
δ12 + δ22
n1 n2

Where X = mean of sample 1

X2 = mean of sample 2
do = Hypothesis difference between the
population means
δ21 = Variance of Sample 2
δ22 = Variance of sample z
n1 = size of sample 1
n2 = size of sample 2
α = 0.05 level of significance
 78

X1 = 183,924,000+14,040,000,+47,268,000+ 1,404,000+
2,808,000+204,516,000+327,600+1,404,000+7,488,00
0+936000+7,938,000+17922,000+8,160,000+2,430,00
0+30,000.
18

X1 = 500,595,600 = 27,810,866.67

X2 = 208,363,197+67,546,320+80,826,189+690,757+
7,330,592+76,785,404+172,092+1,612,350+4,50
5,450+9,753,433+6,431,650++1,370,950+17,200
18

X2 = 465405584 = 25,85586.78
18

n1 = n2 = 18
2 n
δ = Σ (X1 – X)2
1 i=1

n-1
2
δ = (183,924,000-27,810,866.67)2+(14,040,000-27,810,866.67)2
1
+ (47,268,000-27,810,866.67)2+(1,404,000-27,810,866.67)2
+ (2,808,000-27,810,866.67)2+(204,516,000-27,810,866.67)2
+(327,600-27,810,866.67)2+(1,404,000-27,810,866.67)2+
(7,488,000-27,810,866.67)2+(936,000-27,810,866.67)2+
(7,938.000-27,810,866.67)2+(17,922,000-27,810,866.67)2+
(8,160,000-27,810,866.67)2+(2,430,000-27,810,866.6)2+
(30,000-27,810,866.67)2
 79

2
δ 1 = 2.43713104x1016+1.896367688x1014+3.785800374x1014
+6.973226073x1014+6.251433417x1014+3.122470415x1016
+7.553299469x1014+6.973226073x1014+4.130189097x1014
+7.222584585x1014+3.949308287x1014+9.778968402x1013
+3.861565609x1014+6.441883929x1014+7.717765529x1014

2
δ = 6.236,946,285x1016 = 6.236946285x1015
1
18-1 17

δ21 = 3.668791932x1015

2
δ 2 = (208,363,197-25,85586.78)2+(67,546,320-25,85586.78)2
+(80.826.189-25,85586.78)2+(690,757-25,85586.78)2
+(7,330,592-25,85586.78)2+(76,785,404-425,85586.78)2
+(172,092-25,85586.78)2+(1612,350-25,8 25,85586.78)2
+(4,505,450-25,85586.78)2+(9,753,433-25,85586.78)2
+(6,431,650-25,85586.78)2+((1,370,950-25,85586.78)2
+(17,200-15.8586.78)2

δ22 = 4.234442487x1016+4.21989686x1015+6.121591836x1015
+3.590379895x1012+2.251507454x1013+5.505612875x1015
+5.824957053x1012+9.471898299x1011+3.685874784x1012
+5.137801943x1013+1.479220229x1013+1.475342507x1012
+6.596610652x1012
 80

δ22 = 5.830,248245x1016 = 5.830248245x1016

18-1 17

2
δ 2 = 3.429557791x1015

Substituting the above results in the formular

Z = X1 - X2 – do
2 2
δ + δ assume do = 2
1 2

n1 n2

Z = 27,810,866.67-2,585,586.78 – 2
3.668791932x1015 + 3.429557791x1015
18 18

Z = 25,225,277.89
2.03821774x1014+1.90530995x1014

Z = 25,225,277.89
3.94352769x1014

Z = 25,225,277.89
1.985831738x1014

Z = 1.270262601x1021
 81

Decision Rule
Reject Ho at α - level of significance if
Z> Z α or Z<-Zα
2 2
Reject Ho at α - level of significance if

Z> Z α or Z < - Z α for one sided hypothesis

Decision:

Since the test statistics Z = 1.270262601 x 102 is

greater than the critical value Z 0.025 = 1.96, i.e. Z =

1.270262601x1021> Z 0.025 = 1.96. We reject null

hypothesis and conclude that there is significant difference

between the mean targets and mean actual of tax collection

in Enugu state in 2000.

 82

YEAR 2001

X1 = 470,149,813.34+121,160,801.03+17,954220.33+
1,306,588+19,584+138,706,382.37+489,976+2,181,551+
6,329,620+12,173,530+21,700,000+1,978,640+27,500+4,
500,000
18
X1 = 798,678,205.6
18

X1 = 44,371,011.42

X1 = 452,000,000+116,000,000+56,500,000+5,000,000+
187,000,000+555,000,000+10,000.000+-+-+-+-16,050,000+
30,000,000+8,160,000+2,500,000+30,000,000

X1 = 1,468,210,000 81,567,222.22
18
n1 = n2 = 18

δ2 = Σn (X1 – X)2
i=i
1

n-1

δ 12 = (470,149,813.34-44,371,011.42)2+(121,160,801.03
-44,371,011.42)2+(17,954,220.33-44,371,011.42)2+
(1,306,588-44,371,011.42)2+138,706,382.37-
44,371,011.42)2+(489,976-44,371,011.42)2+(2,181,551-
44,371,011.42)2+(6,329,620-44,371,011.42)2+12,173,530-
44,371,011.42)2+(21,700,000-44,371,011.42)2+(1,978,640-
44,371,011.42)2+(27,500-44,371,011.42)2+(4,500,000-
44,371,011.42)2
 83

2
δ 1 = 1.812875881x1017+5.896671784x1015+6.978468515
x1014+1.854544564x1015+8.899162199x1015+1.92554
527x1015+1.77995057x1015+1.447147461x1015+1.036
67781x1015+5.139747588x1014+1.797113155x1015+1.
966347005x1015+1.589697552x1015.

2
δ1 = 2.106922671x1017 = 2.106922671x1017
18-1 17

2
δ1 = 1.239366277x1016

2
δ1 = (452,000,000-81567,222.22)2+(116,000,000-81
,567222.22+(56,500,000-81,567,222.22)2+(5,000,000-
81,567,2222.22)2+(187,000,000-81,567,222.22)2+
(555,000,000-81,567,222.22)2+(10,000,000 -81,567,
222.22)2+(160,050,000-81,567,222.22)2+(2,500,000-
81,567,222.22)2+(30,000,000-81,567,222.22)2

2
δ 2 = 1.372204429x1017+1.185616186x10156.283656298x1014
+5.862539518x10151.111607063x1016+2.241385951x1017
5.121867296x1015+4.292506407x10152.659178407x1015+
5.388620274x1015+6.25162563x1015+2.659178407x1015

2
δ2 = 4.065246064x1017 = 4.065246064x1017
18-1 17

2
 84

δ2 = 2.391321214x1016

Substituting the above results in the formular

Z = X1 - X2 – do
2 2
δ + δ assume do = 2
1 2

n1 n2
Z = 44,371,011.42-81,567222.22-2
1,239366277x1016 + 2.391321214x1016
18 18

Z = -37,250,212.8
6.885367778x1014+1.328511786x1015

Z = -37,250,212.8
2.017048565x1015

Z = -1.846768266x1022

At 0.05 level of significance for two tail test = 0.025

Decision Rule:

Reject Ho at α - level of significance if

Z > Z α or Z <- Z α
2 2

Reject Ho at α - level of significance if

Z > Z α or Z < - Z α for one sided hypothesis

 85

Decision
Since the test statistics Z = -1.846768266x1022 is

greater than the critical value Z 0.025 = -1.96, i.e. Z = -

1.846768266 x 1022 > - Z 0.0025 = -1.96, we reject null

hypothesis and concluded that there is significant difference

between the mean targets and mean actual of tax collection

in Enugu state in 2001.

 86

YEAR 2002

452,000,000+116,000,000+56,500,000+5,000,000+187,
X1 = 000,000+555,000,000+10,000,000+16,050,000+30,000,0
00+21,700,000+2,500,000+30,000,000
18

X1 = 1,465,702,000
18 = 81,427,888.89

X2 = 449,082,096.81+119,235,878.65+14962,156.23+
1,194,800+19,107+135,949,317.37+19,950+3,22
6,974.95+8,122,400+15,258,010+19,569,850+2,4
36,430+390,610+6,708,000
18

X2 = 776175580.9 = 43,120,865.6
18

n1 = n2 =18

n
2
δ = Σ (X1 – X)2
1 i=1

n-1
 87

2
δ1 = (452,000,000-81,427,888.89)2+116,000,000-
81,427,888.89)2+(56,500,000-81,427,888.89)2
+5,000,000-81,427,888.89)2+(187,000,000-
81,427,888389)2+(555,000,000-81,427,888.89)2+
(10,000,000-81,427,888.89)2+(16,050,000-
81427888.89)2+(21,700,000-81,
427,888.89)2+(2,500,000-81,427,888.89)2+
(30,000,000-81,427,888. 89)2

2
δ1 = 1.373236895x1017+1.19523867x10156.213996445x1014+
5.8412222x1015+1.114547064x10162.242705444x1017+
5.101943311x1015+4.274268356x10152.644827756x1015
+3.567420711x10153.184106646x1013+2.644827756x1015

δ12 = 3.986626862x1017 = 3.986626862x1017

18-1 17

2
δ1 = 2.345074625x1016

2
δ2 = (449,082,096.81-43,120,856.6)2+(119,235,878.
65-43,120,856.6)2+(14,962,156.23-43,120,
856.6)2+(1,194800-43,120,523.6)2+(19,107-
43,120,856.6)2+(135,949,317.37-43,120,856.6)2+
(19,950-43,120,856)2(3,226,974.95-43,120,
856.6)2+(8,122,400-43,120,856.6)2+(15,258,010-
43,120,856.6)2+(19,569,850-43,120,856.6)2+
(2,436,430-43,120,856.6)2+(390,610-
43,120,856.6)2+6,708,000-43, 120,856.6)2
 88

2
δ1 = 1.648045285x1017+5.793496574x1015
7.929124065x1014+1.757794222x1015
1.857760819x1015+8.617123116x1015
1.85768815x1015 +1.591521793x1015
1.224891964x1015+7x763382207x1014
5.546499119x1014+1.655222568x1015
1.825873974x1015+1.325896126x1015

2
δ1 = 1.944356983x1017 = 1.944356983x1017
18-1 17
= 1.143739402x1016

Substituting the above results in the formula

Z = X1 - X2 – do
2 2
δ + δ assume do = 2
1 2
n n2
1

Z = 81,427,888.89-43,120,865.6-2
2.345074625x1016 + 1.143739402x1016
18 18

Z = 38,307023.29-2
1.302819236,1015 + 6.354107789x1014

Z = 38,307,021.29
1.938230015,1015
 89

Z = 38,307,021.29
1.392203295x1015

Z = 2.751539335x1022

At 0.05 level of significance for two test = 0.025.

Decision Rule:
Reject Ho at α - level of significance if
Z > Z α or Z <- Z α
2 2

Reject Ho at α - level of significance if

Z > Z α or Z < - Z α for one sided hypothesis

Decision:
Since the test statistic Z = 2.751539335x1022 is greater

than the critical value Z 0.025 = 1.96, i.e. Z = 2.751539335

x 1022 > Z 0.025=1.96, we reject Ho and concluded that

there is significant difference between the mean target and

mean actual of tax collection in Enugu sate in 2002.

 90

YEAR 2003

X1 = 460,000,000+125,000,000+50,000,000+5,000,000+

10,000,000+200,000,000+50,000+10,000,000+1,000
+1000+1000+101,000,000+20,000,000+25,000,000+
3,000,000+150,000+7,000,000
18

X1 = 1,016,203,000 = 56,455,722.22
18

X2 = 476,577,069.65+123,660,547.66+12,251,380.46+
1,581,577.21+24,640+116,562,519.05+303,880+968,
190+17,775,100+34,806,565+29,490,350+2,577,110
+775,040+7,511,865
18

X2 = 824,865,833.9 = 45,825,879.66
18

n1 = n2 = 18

2 n
δ = Σ (X1 – X)2
1 i=1

n-1
 91

2
δ = (460,000,000-56,455,722.2)2+(125,000,000-
1
56,455,722.22)2+(50,000,000-56,455,722.22)2
(5,000,000-56,455,722.22)2+(10,000,000-56,
455,722.22)2+(200,000,000-56,455,722.22)2
(50,000-56,455,722.22)2+(10,000,000-56,455,
22.22)2+(1,000-56455,722,22)2+(10-56,455,
22.22)2+(1,000-56,455,722.22)2+(101,000,000-
56,455,722.22)2+(20,000,000-56455,722.22)2
(25,000,000-56,455,722.22)2+(3,000,000-
56,455,722.22)2+(150,000-56,455,722.22)2
(7,000,000-56,455,722.22)2

2
δ = 1.628479841x1017+4.698318016x1015
1
4.1676304938x1013+2.647691349x1015
1.896147674x1013+2.060495968x1015
3.181605499x1015+1.896147674x1013
3.187135661x1015+3.187135661x1015
3.187135661x1015+1.984192683x1015
1.329019683x1015+9.894624604x1014
2.857514238x1015+3.170334355x1015
2.44586846x1015

2
δ = 1.978534931x1017 = 1.978534931x1017
1
18-1 17
 92

2
δ1 = 1.163844077x1016

2
δ2 = (476,577,069.65-45,825,879.66)2+(123,660,547. 66
-45,825,879.66)2+(12,251,380.46-45,825,879.66)2
+(1,581,577.21-45,825,879.66)2+(24,640-
45,825,879.66)2+(116,562,519.05-45,825,879.66)2
+(303,888-45,825,879.66)2+(968,190-
45,825,879.66)2+(17,775,100-45,825,879.66)2+
(34,806,565-45,825,879.66)2+(29,490,350-
45,825,879.66)2+(2,577,110-45,825,879.66)2+
(775,040-45,825,879.66)2+(7,511,865-
45,825,879.66)2

2
δ2 = 1.855465876x1017+6.058235533x1015+
1.127246997x1015+1.957558299x1015+2.097753
554x1015+5.003672145x1015+2.072252453x1015+
2.012212322x1015+7.868462395x1014+1.214252
956x1014+2.668495293x1014+1.870456077x1015+
2.029578154x1015+1.4679631719x1015

2
δ = 2.124186373x1017 = 2.124186373x1017
2
18-1 17

2
δ = 1.249521396x1016
2
 93

Substituting the above results in the formula

Z = X1 - X2 – do
2 2
δ + δ
1 2

n1 n2

Z = 56,455,722.22 – 45,825,879.66-2
1.163844077 x1016 + 1.249521396x1016
18 18

Z = 10,629,840.56
6.465800428 x1014 + 6.941785533x1014

Z = 10,629,840.56
1.340758596

Z = 10,629840.56
1.157911307

Z = 9,180,185 .4 73

At 0.05 level of significance for two tail test = 0.025.

Decision Rule:
Reject Ho at α - level of significance if
Z > Z α or Z <- Z α
2 2
 94

Reject Ho at α - level of significance if

Z > Z α or Z < - Z α for one sided hypothesis

Decision:

Since the test statistics Z = 9,180,185.473 is greater

than the critical value Z 0.025 = 1.96, i.e. Z = 9,180,185.473

> Z 0.025 = 1.96, we reject Ho and conclude that there is

significantly different between the mean target and mean

actual of tax collection in Enugu state in 2003.

 95

YEAR 2004

X1 = 480,000,000+130,000,000+50,000,000+
5,000,000+15,000,000+155,000,000+800,000+
20,000,000+1,000+1,000+70,000,000+1,000+16,
400,000+30,500,000+26,500,000+2,700,000+941
,400+7,060,000
18

X1 = 1,009,904,400

18

X1 = 56,105,800

X1 = 565,847,227.43+160,306,904.74+11,441,2
46.05+814,740.00+37,080.00+102,447,205.15+2
77,160.00+963,440.00+0+0+0+0+22,094,610.00+
37,182, 630.00+16,603,470.00+3,184,390.00+
151,200.00+65,920.00
18
`

X1 = 921417223.3
18

X1 = 51,189,845.74
 96

n1 = n2 = 18

2 n
δ = Σ (X1 – X)2
1 i=1

n-1

2
δ = (480,00,000-56,105,800)2+(130,000-56,105,
1
800)2+(50,000,000-56,105,800)2+(5,000,000-
56,105,800)2+(15,000,000–56,105,800)2+
(155,000,000-56,105,800)2+(800,000-56,
105,800)2+(20,000,000-56,105,800)2+(1,000-
56,105,800)2+(1,000-56,105,800)2+(70,000,000-
56,105,800)2+(1,000-56,105,800)2+(16,400,000-
56,105,800)2+(30,500,000-56,105,800)2+
(26,500,00-56,105,800)2+(2,700,00-56,105,
800)2+(941,400-56,105,800)2+(7,060,000-
56,105,800)2

2
δ = 1.796862928x1017+3.133290186x1015+
2
3.728079364x1013+2.611802794x1015+1.689686
794x1015+9.780062794x1015+2.314379664x1013
+1.303628794x1015+3.147748583x1015+3.14774
853x1015+1.930487936x1014+3.147748583x1015+
1.576550554x1015+6.556569936x1014+8.765033
936x1014+2.852179474x1015+3.043111027x1015+
2.405490498x1015
 97

2
δ = 2.193110739x1017 = 2.193110739x1017
1
18-1 17

2
δ = 1.290065141x1016
1

2
δ = (565,847,227.43-51,189,845.74)2+ (160,306,
2
904.74-51,189,845.74)2+(11,441,246.05-
51,189,845.74)2+(814,740.00-51,189,845.74)2+
(37,080.00-51,189,845.74)2+(102,447,025.15-
51,189,845.74)2+(277,160-51,189,845.74)2+
(37,182,630-51,189,845.74)2+(16,603,470-
51,189,845.74)2+(37,182,630-51,189,845.74)2+
(16,603,470-51,189,845.74)2+(3,184,390-
51,189,845.74)2+(151,200-51,189,845.74)2+
(65,920-51,189,845.74)2.

2
δ = 2.648722205x1017+1.190653256x1016
1
1.580030676x1015+2.537651278x1015
2.616605443x1015+2.627298436x1015
2.592101569x1015+2.522691834x1015
8.465327428x1014+1.962020928x1014
1.196217387x1015+2.304523781x1015
2.604943359x15+2.613655783x1015

2
δ = 3.010172074x1017 = 3.010172074x1017
2
18-1 17
 98

2
δ = 1.770689455x1016
2

Substituting the result in the formula

Z = X1 - X2 – do
2 2
δ + δ assume do = 2
1 2

n1 n2

Z = 56,105,800-51,189,845.74-2
1.290065141 x1016 + 1.770689455x1016
18 18

Z = 4,915,952.26
7.167028561 x1014 + 9.837163639x1014

Z = 4.915952.26
1.70341922x1015

Z = 4915952.26
1.305151033x1015

Z = 3.766577305x1021

At 0.05 level of significance for two tail test = 0.025.

 99

Decision Rule:
Reject Ho at α - level of significance if
Z > Z α or Z <- Z α
2 2
Reject Ho at α - level of significance if

Z > Z α or Z < - Z α for one sided hypothesis

Decision:

Since the test statistic Z = 3.76657735x1021 is greater

than the critical value Z 0.025 = 1.96, i.e. Z =

3.766577305x1021 > Z0.025=1.96, we reject Ho and

conclude that there is significant difference between the

mean target and mean actual of tax collection in Enugu

state in 2004
 100

YEAR 2005

X1 =
600,000,000+200,000,000+130,000,000
+16,500,000+10,000,000+220,000,000+500,
000+3,500,000+15,000,000+0+80,000,000+
0+18,000,000+40,000,000+25,000,000+2,00
0,000+800,000+7,600,00
18

X1 = 1,368,900,000
18

X1 = 76,050,000

X1 = 1,030,673,644.74+152,404,218.25+19,202,
935.55+311,815.04+66,160+124,962,160.63+204
,792+1,070,551+1,928,750+0+0+0+20,348,245+4
1,884,413+25,262,347+3,449,190+126,940+3100

X2 = 3,579,230
18

X2 = 19,846.11

n1 = n2 = 18
n
δ2 = ∑ (X1 - X)2
i=1
n-1
 101

2
δ = (600,000,000-76,050,000)2+(200,000,000-76,
1
050,000)2+(130,000,000-76,050,000)2+(16,500,
000-76,050,000)2+(10,000,000-76,050,000)2+
(220,000,000-76,050,000)2+(500,000-76,050,
000)2+(3,500,000-76,050,000)2+(15,000,000-
76,050,000)2+(80,000,000-76,050,000)2+(18,000,
000-76,050,000)2+(40,000,000-76,050,000)2+
(25,000,000-76,050,000)2+(2,000,000-76,050,
000)2+(800,000-76,050,000)2+7,600,000-76,
050,000)2

2
δ = 2.745236025x1017+1.53636025x1016
1
2.9106025x15+3.5462025x1015
4.3626025x1015+2.07216025x1016
5.7078025x1015+5.2635025x1015
3.7271025x1015+1.56025x1013
3.3698025x1015+1.2996025x1015
2.6061025x1015+5.4834025x1015
5.6625625x1015+4.6854025x1015

2
δ = 3.592487938x1017 = 3.592487938x1017
1
18-1 17

2
δ = 2.113228199x1016
1
 102

2
δ = (1,030,673,644.74-198,846.11)2+(152,404,
1
218.25-198,846.11)2+(19,202,935.55-198,846.
11)2+(124.962.160.63-198,846.11)2+(311,815.04 –
198,846.11)2+(66,160 – 198,846.11)2+
(124,962,160.63 – 198,846.114.11)2+(204,792-
198,846.11)2+(1,070,551-198,846.11)2+
(1.928.750-198.846. 11)2+(20,348,245-198,
846.11)2+41,884,413-198,846.11)2+(25,262,347-
198 ,846.11)2+(3449,190-198,846.11)2+(126,940-
198,846.11)2+(13,100-198,846.11)2

2
δ = 1.06178309x1018+2.316647529x1016
2
3.611554154x1014+1.276197915x1010
1.760560379x1010+1.556588464x1016
35,353,607.89+7.598694152x1011
2.992567469x1012+4.059982756x1014
1.737686487x1015+6.281790769x1014
1.05647354x1013+5.170,488,655x1014
3.450161738x1010

2
δ = 1.103076858x1018 = 1.103076858x1018
2
18-1 17

2
δ = 6.4886874x1016
2
 103

Substituting the above results in the formula

Z = X1 - X2 – do
2 2
δ + δ
1 2

n1 n2

Z = 76,050,000 - 198,846.11-2
2.113228199x1016 + 6.4886874x1016
18 18

Z = 75,851,151.89
1.174015666 x1015 + 3.604826333x1015

Z = 75851151.89
3.604826333x1015

Z = 75,851,151.89
1.898638021x1015

Z = 3.99502965x1022

At 0.05 level of significance for two tail test = 0.025.

 104

Decision Rule:
Reject Ho at α - level of significance if
Z > Z α or Z <- Z α
2 2

Reject Ho at α - level of significance if

Z > Z α or Z < - Z α for one sided hypothesis

Decision:

Since the test statistic Z = 3.99502965 x 1022 is greater

than the critical value Z0.025 = 1.96, i.e. Z =

3.99502965x1022 > Z 0.025 = 1.96, we reject Ho and

conclude that there is significant difference between the

mean target and mean actual of tax collection in Enugu

state in 2005.
 105

YEAR 2006

One-sample Z-test

Z = X - µo
δ n
Where

X = sample mean

µo = Hypothesized population mean

δ = Population standard deviation

n = Sample size

X = 1.871,240.54 + 118,719,322.10 + 14,058,394.15

+ 422,650 + 23,898.60 + 163,613,415.80+
118,710 + 1,307,800 +923,200 + 11,556,527
+34,141,882 + 21,925,850 + 1,906,442 + 190,902
+297,500 + 700,019,103 + 473,123,488 + 0
17

X = 1,544,220,325
17

= 90,836,489.72
 106

δ2 =(1,871,240.54-90,836,489.72)2 + 118,719,322.10
-90,836,489.72)2 + 14,058,394.15-90,836,489.72)2
+(422,650-90,836,489.72)2 (23,898.60-90,836,489.72)2
+ (163,613,415.80-90,836,489.72)2 + (118,710-
90,836,489.72)2 + (1,307,800-90,836,489.72)2 +
(923,200-90,836,489.72)2 + (2,170,718,631.19-
90,836,489.72)2 + (11,556,527-90,836,489.72)2 +
(34,141,882-90,836,498.72)2 + (21,925,850-
90,836,489,72)2 + (1,906,442-90,836,489.72)2 +
(190,902-90,836,489.72)2 + (297,500-90,836,489.72)2
+ (700,019,103-90,836,489.72)2 + (473,123,488-
90,836,489.72)2

n
δ2 = ∑ (X1-X )2
i=1

n-1

δ2 = 7. 914815597 x 1015 + 7.774523415 x 1014

5. 894875959 x 1015 + 8.174662413 x 1015

8. 246926706 x 1015 + 2.676934983 x 1016
8. 229715557 x 1015 + 8.015386283 x 1015
8. 084399668 x 1015 + 4.325909722 x 1018

6. 285312489 x 1015 + 3.214278545 x 1015

4. 748676267 x 1015 + 7.908553387 x 1015
8. 216622573 x 1015 + 8.19730866 x 1015
3. 711034563 x 1017 + 1.461433491 x 1017
 107

δ2 = 4.963834864 x 1018
17-1
δ2 = 4.963834864 x 1018
16
δ2 = 3.10239676 x 1017

δ = 3.10239676 x 1017 = 1.761362189 x 1017

Substituting in result in the formalar

Z = X – µo assume µo = 2
δ n

Z = 90,836,489.72-2
1.761362189 x 1017

17

Z = 90,836,489.72-2
1.761362189 x 1017
4.123105626

Z = 90,836,487.72 x 4.123105626
1 1.761362189 x 1017
Z = 374,528,433.6
1.761362189 x 1017

Z = 2.126356725 x 1025
 108

At 0.05 level of significance for one tail test

Decision rule

Reject Ho at α - level of significance if

Z ≥ Zα or Z ≤ - Zα

Decision

Since the test statistic Z = 2.126356725 x 1025 is

greater than the critical value Z0.05 = 1.645 ie Z =

2.126356725x1025 > Z0.05 =1.645 We reject Ho and

conclude that there is significant difference between the

mean target and mean actual of tax collection in Enugu

State in 2006
 109

YEAR 2007
-
X = 948,741,898.31 + 172,540,582.56+50,269,684.69

+ 20,338,423.34 + 17,110 +236,578,820.88 +

23,746 + 733,400 + 319,825 + 10,127,718 +
57,103,912 + 7,398,940 +1,709,250 +150,775
+430,000 + 76,920,595, + 1,271,906,711.22 +
2,753,090.802
17
-
X = 5,608,402,199
17

-
X = 329,906,011.7

δ2 = (948,741,898.31-329,906,011.7)2+(172,540,582-
329,582-329,906,011.7)2+(50,269,684.69-
329,906,011.7)2+(20,338,428.34329,906,011.7)2
+17,110-329,906,011.7)2+(236,578,820.88-
329,906,011.7)2+(23,746-329,906,011.7)2+
(733,400-329,906,011.7)2+(319,825
329,906,011.7)2+(10,127,718-329,906,011.7)2 +
(57,103,912-329,906,011.7)2 + (7,398,940-
329,906,011.7)2+(1,709,250-329,906,011.7)2+
(150,775-329,906,011.7)2+(430,000-329,906,
011.7)2+(76,920,595-32329,906,011.7)2+
(1,271,906,711329,960,011.7)2+(2,753,090,
802-329,906.011.7)2
 110

δ2 = 3.829578545x1017+2.476387846 x 1016
7.819647538x1016+9.58320867 x 1016
1.088266875 x 1017+8.709964561x1015
1.088223092 x 1017+1.083546083 x 1017
1.086270545 x 1017+1.022581571 x 1017
7. 44209856 x 1016+1.040108113 x 1017
1.077131144 x 1017+1.087385161 x 1017
1.085544423 x 1017+6.400162106 x 1016
8.873653175 x 1017+5.871824528 x 1018

n -
δ2 = ∑ (X1 - X)2
i=1

17-1

δ = 8.453978415 x 1018
16

δ = 5.283736509x1017

δ = 2.298637968 x 1017

Substituting the above results in the formula

Z = X - µo
δ n assume µo = 2

Z = 329,906,011.7-2
2.298637968 x 1017
17
 111

Z = 329,906,009.7
2.298637968 x 1017
4.123105626

Z = 329,906,009.7 x 4.123105626
1 2.298637968 x1017

Z = 1.360,237,325
2.298637968 x 1017

Z = 5.917579643 x 1025
At 0.05 level of significance for one tail test

Decision rule
Reject Ho at α - level of significance if
Z ≥ Zα or Z = - Zα

Decision

Since the test statistic Z = 5.917579643 x 1025 is

greater than the critical value Z0.05 = 1.645, ie Z =

5.917579643 x 1025 > Z 0,05 = 1.645, we reject Ho and

conclude that significant difference between the mean target

and mean actual of tax collection in Enugu State in 2007

 112

YEAR 2008

X = 1,819,964,544+210,719,091.90+140,290,537.86+
70,654,448+ 50,042,060+273,454,676.35+1,282,
800+6,801,480+33,147,265+12,019,445+59,337,
539+7,463,790+1,948,885+200,000+650,000+81,
619,659+307,136,046.01+3,504,885,391.88

X- = 4,017775,908
17
-
X = 236,339,759.3

n -
δ2 = ∑(X-X)2
i=1
n-1

δ2 = (1,819,964,544-236,339,759.3)2(210,719.091.90-
236,339,759.3)2+(140,290,537.86236,339,759.3)2
+(70,654,448-236,339,759.3)2 + (50,042,060-236,
339,759.3)2+(273,454,676.35-236,339,759.3)2+(1,
282,800-236,339,759.3)2+(6,801,480-236,339,
759.3)2+(33,147,265236,339,759.3)2+(12,019,445
236,339,759.3)2+(59,337,539236,339,759.3)2+(7,4
63,790-236,339,759.3)2+(1,948,885236,339,
759.3)2+(200,000-236,339,759.3)2+ (650,000236,
339,759.3)2+(81,619,659236,339,759.3)2+(307,13
6,046.01-236,339,759.3)2+(3,504,885,391.88-
236,339,759.3)2
 113

δ2 = 2.507867459 x1018+6.56418598x1014
9.225452951x1015+2.745162238x1016
3.470683276 x 1016+1.377517064 x 1015
5.525177412 x 1016+5.268782166 x 1016
4.128718974 x 1016+5.031960341 x 1016
3.132978599 x 1016+5.238420932 x 1016
5.493908196 x 1016+5.576198592 x 1016
5.554966264 x 1016+2.393830944 x 1016
5. 012114211 x 1015+1.068339055 x 1015

δ2 = 3.06081518 x 1018

17-1

δ2 = 3.06081518 x 1018

16

δ = 1.913009488 x 1017

δ = 1.383115862 x 1017

Substituting the above results in the formula

Z = X-µo
δ n
Assume µo = 2

Z = 236,339,759.3-2
1.383115862 x 1017
4.123105626
 114

Z = 236,339,957.3
1.383115862X1017
4.123105626

Z = 236,339757.3 x 4.123105626
1 1.383115862 x 1017

Z = 7.045351801 x 1025

At 0.05 level of significance for one tail test Decision rule.

Project Ho at x –level of significance if

Z ≥ Zα or Z ≤ - Zα

Decision
Since the test statistic Z = 7.045351801 x 1025 is

greater than the critical value Z0.05 = 1.645, ie Z =

7.045351801 x 1025 > Z0.05 = 1.645, we reject Ho and

conclude that there is significance difference between mean

target and mean actual of tax collection in Enugu State in

2008.
 115

YEAR 2009

X = 2,598,675,632.25+198,729,122.70+
190,604,977.38+1,642,326+25,769,130+
267,893,765.50+92,630+1,139,100+13,087,625+
15,116,925+126,264,050+18,146,600+4,373, 950
+4,501,000+18,000,000+186,402,525+
958,367,456 + 3,870,576,166.17

17
X = 8499382981
17

X = 499,963,704.8

n
δ2 = ∑ (X1 - X)2
i=1

n-1

δ2 = (2,598,675,632.25-499,963,704.8)2+(198,729.122.70-
499,963,704.8)2+(190,604,977.38-499,963,704.8)2
+(1,642,326-499,963,704.8)2+(25,769,130-
499,963,704.8)2+(267,893,765.50-499,963,704.8)
2+(92,630-499,963,704.8)2+(13.087,625-499,963,

704.8)2+(15,116,925-499,963,704.8)2+(126,264,
050-499,963,704.8)2+(18,146,600-499,963,
704.8)2+(4,373,950-499,963,704.8)2+(4,501,000-
499,963,704.8)2+(18,000,000-499,963,704.8)2+
(186,402,525-499,963,704.8)2+(958,367,456-
499,963,704.8)2+(3,870,516,166.17-
499,963,704.8)2
 116

δ2 = 4.404591753x1018+9.074227345x1016
9.570282228x1016+2.483241966x1017
2.248604948x1017+5.385645673x1016
2.498710914x1017+2.488259864x1017
2.370483171x1017+2.350763999x1017
1.39651432 x1017+2.321477225x1017
2.456092051x1017+2.454832918x1017
2.322890127x1017+9.832061348x1016
2.101339991x1017+1.498089539x1019

δ2 = 2.247343046 x 1019 =2.247343046 x 1019

17-1 16
δ =
1.404589404 x 1018
= 1.185153747 x 1018

Substituting the above results in the formula

Z = X-µo
δ n assume µo = 2

Z = 499,963,704.8-2
1.185153747x1018
17

Z = 499,963,702.0
1.185153747 x 1018
4.123105626
Z = 499,963,702.8 x 4.123105626
1 1.185153747 x 1018
 117

Z = 2.061,403,156
1.185153747 x 1018

Z = 1.739355051 x 1027

At 0.05.level of significance for one tail test

Decision rule:
Reject Ho at α -level of significance if

Z ≥ Zα or Z ≤ = - Zα

Decision

Since the test statistic Z =1.739355051 x 1027

Is greater than the critical value Z0.05 = 1.645, ie Z = 1.739

55051 x1027> Z0.05 = 1.645, we reject Ho and conclude that

there is significant difference between the mean target and

mean actual of tax collection in Enugu State in 2009.

 118

YEAR 2010

-
X = 2,086,517,572+244,540,769+78,894,222+
22,555,183+45,320,312+749,138,278+249,982+
41,064,505+23,740,400+18,092,383+128,695,41
2,+17,521,135+9,131,750+5,032,860+15,000,000
+193,473,542+1,402,644,358.47+3,228,620,137.07
17

-
X = 8,310,232,800
17
-
X = 488,837,223.5

n -
δ2 = ∑ (X1 - X)2
1=1

n-1

δ2 = (2,086,517,572-488,837,223.5)2+(244,540,769-
488,837,223.5)2+(78,894,222-488,837,223.5)2+
(22,555,182-488,837,223.5)2+(45,320,312-
488,837,223.5)2+(749,138,272-488,837,223.5)2+
(249,982-488,837,223.5)2+(41,064,505-488,837
,233.5)2+ (23,740,400-488,837,223.5)2+(18.092,385-
488,837,223.5)2+(128,695,412-488,837,223.5)2 +
(17,521,135-488,837,223.5)2+(9,131,750-
488,837,223.5)2+(5,032,860-488,837,223.5)2+
(15,000,000-488,837,223.5)2+(193,473,542-
488,837,223.5)2+(1,402,644,358-488,837,223.5)2+
(3,228,620,137-488,837,223.5)2
 119

δ2 = 2.552582496x1018+5.968075768x1016
2.313107878x1017+2.174189413x1017
1.967072508x1017+6.775663585x1016
2.387174926x1017+2.005004074x1017
2.163150552 x1017+2.21600703x1017
1.297021244x1017+2.221388553x1017
2.301173413x1017+2.340666621x1017
2.245217144x1017+8.723970435x1016
8.350434791x1017+7.506410413x1018

δ2 = 1.367183078 x 1019 = 1.367183078 x 1019

17-1 16

= 8.544894238 x 1017

δ = 8.544894238 x 1017

δ = 2.923165106 x 1017

Z = X – µo
δ n assume µo = 2

Z = 488,837,223.5-2
2.923165106
4.123105626

Z = 488,837,2235. x 4.123105626
1 2.923165106

Z = 2.015,527,506 = 689,501,767.1
2.923165106
 120

At 0.05 level of significance for one tail test

Decision rule:
Reject Ho at α -level of significance if
Z ≥ Zα or Z ≤ - Zα

Decision
Since the test statistic Z = 689,501,767.1 is greater

than the critical value Z 0.05 = 1.645, ie Z = 689,501,767.1

> Z 0.05 = 1.645, we reject Ho and conclude that there is

significant difference between the mean target and mean

actual of tax collection in Enugu State in 2010.

 121

REFERENCES

Obi F. (2006), “Research Methods in Management,” Port

Harcourt: Pearl Publishers.

Okeke A. O. (2001), “Foundation Statistics for Business

Decision,” Enugu: Mccro Academic Publishers.

Egbu K. (1998), “Groundwork of Research Methods and

Procedures,” Enugu: Institute for Developmental
Studies.
 122

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND

RECOMMENDATIONS

5.1 SUMMARY OF FINDINGS

In carrying out this study, after due and careful

analysis of the data obtained from this study the researcher

hereby observes that the research study was a very useful

one as it exposed him to a lot of constructive challenges and

subsequently enable him to gather much relevant experience

in the process, hence the following observations became

apparent. That:-

a. The respondents stated that money collected from

taxes are not well accounted for, this in the sense

that tax officials divert the revenue made from the

tax payers and this fraudulent act in turn

demoralizes them to make further payments of

taxes.

b. It is also discovered that the revenue generated from

taxes are not properly utilized by government. This

 123

act has made government to be irresponsible and

irresponsive towards actualizing the economic and

social goals.

c. There is a high rate of tax avoidance and tax

evasion.

d. There where no serious provisions in the tax laws for

adequate tax enforcement.

e. The penalties for not paying tax is not adequate to

deter people from avoiding to pay tax.

f. The records of business transactions are not

properly kept.

g. The tax payers indulge in fictitious claims of tax

relief’s.

h. The opinions of both tax payers and tax officials

favour the notion that the Nigerian Tax laws are due

for review.

i. The act contains a lot of ambiguities both in the

constitutional frame work and judicial

interpretation.
 124

Hence the tax laws as they are at the moment leaves

much to be desired, they are still far from being adequately

fine-tuned as would not only provide the necessary

framework for keeping the cannons of taxation religiously

but also enable the Nigerians reap the full benefits of

taxation.

5.2 CONCLUSION

It is clear that the personal Income Tax Act 104 of

1993 (as amended) create a district legal regime for taxation

of the income. Inpsite of the fact that the Act made generous

provisions as to be assessed in the hands of the tax payers,

the tax yield does not reflect these generous provisions.

Since this is the case there is the need to review its

provision so as much as possible to meet the classical

cannons of a good tax system as well as the developmental

needs of the economy particularly, this time that oil market

and revenue has been politicized.

Attention is therefore, needed to develop other non-oil

based taxes:-
 125

Personal income tax, stamp duty, value Added Tax,

Agricultural produce tax, etc. which by themselves, have low

cost of administration so as to install what right to be

accurately be referred to as an “Economically Viable

Nigerian Tax and Revenue Structure”.

What the researcher has done so far in this work is a

presentation of the operational circumstances of the

Nigerian Tax Laws as administered by Enugu state

government, the law and practice, problems and suggestions

(recommendations) where appropriate for the over all

improvement of the Act or law.

It is from this dimension that it is expected to emerge,

an effective approach to tax administration which if

materialized would provide a well blended and suitable

personal income tax code from which both the tax payers

and the government can expect to flow a just, fair and

equitable stream of taxes bearing both parties satisfied in

the end.
 126

5.3 RECOMMENDATION

The problems of the Nigerian Tax Laws are many. They,

range from flaunts in the construction of the tax laws.

Ambiguities, administrators, use of consultants,

interpretation of taxing statutes, the court that would

exercise jurisdiction over tax matters etc.

Based on the above problems the following

recommendation are made.

1. Establishment of body of appeal commissioners. It is

recommended that a special revenue court be

established and judges with sound knowledge of the

working system of the Nigerian Tax Laws, especially

the personal income tax laws to be appointed to

such courts. This will being professional ethics and

pave way for accelerated hearing and disposal of

revenue cases.

2. Section 84 (b): Provide that “penalty for

misrepresentation, forgery or falsification in

obtaining tax clearance certificate shall be N500.00.

 127

This should be reviewed upward to N250,000.00 to

meet the present realities (money value).

3. It is recommended that reliefs or allowances be

reviewed upwards, to a reasonable extent to meet

the present realities.

4. Government should embark on various public

enlightenment campaign to educate the tax payers

on their civic responsibility to pay taxes.

5. Government should recruit fresh and qualified

personnel and train them to be able to handle tax

matters, while old personnel should be on the job

training.

6. Tax evasion should be made criminal offences.

7. Increase the welfare package of tax officials by the

government. This will increase their moral and

effectiveness in the performance of their duties,

more over it will reduce the incidence of fraud and

mal practice.
 128

8. Government should sit up by being responsible and

responsive to the yearnings of the citizenry through

actualization of economic and social goals, this is in

turn will make the citizenry to be more law abiding,

being patrotic towards fulfilling their civic

obligations.

5.4 RECOMMENDATION FOR FURTHER STUDIES

The researcher after interaction with tax payers and

tax officials in the course of this work feels obliged to make

some recommendation for further studies regarding the

cortical Appraisal of the Nigeria Tax Laws as Administered

by Enugu State Government.

i) Enugu State government have to device some

measures to improve in their internally generated

revenue, so that reliance on federal allocution should

not be much.

ii) The teeming population should be enlightened on the

importance of tax and government on the other hand

create trust by providing Jobs, security, public utilities,

 129

social amnesties and enabling environment for

business and investments to thrive.

iii) Inadequate date base and absence of tax code to

taxable individuals should be evaluated.

iv) The need for State Tax Laws should be observed as a

tool for effective tax administration.

v) Avoidance of the factors that are responsible for tax

avoidance and aversion.

vi) Comparing the use of direct assessment and collection

if taxes by government and contracting the assessment

and collection of taxes to organization by government,

in other to ascertain the one effective for tax

administration.
 130

BIBLIOGRAPHY

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Akanle W. (1997), “The government, the constitution, and tax

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Akintola W. & Co. (1999) “Taxation and the Federal

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 131

Egbu K. (1998), “Groundwork of Research Methods and

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 132

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 134

APPENDIX

QUESTIONNAIRE

Department of Accountancy
Faculty of Business Administration,
University of Nigeria,
Enugu Campus.

Dear Sir/Madam

This questionnaire being presented for your completion is

purely for academic research purpose in partial fulfillment of
the requirements for an award of MBA degree in
Accountancy of the University of Nigeria.

It is designed to gather information relating to the critical

appraisal of the Nigerian tax laws as administered by Enugu
State Government as the case study.

It is also my request, therefore, that you sincerely answer

these questions as the success of this work depends on your
willingness to do so.
Thanks you.

Yours faithfully,

Aninwene Ekene Celestine.