Tax evasion and avoidance both have negative implications on the economy as they. The importance, how to, effect causes relationship, comparison, history, role. The study of the effects of tax evasion and tax revenues. Causes of tax evasion and tax avoidance in nigeria tax evasion according to uadialeet al. Effects of tax evasion on government revenue generation in oyo state, nigeria folayan d. Case study of federal inland revenue service firsogun state branchproject topics and materials in nigeria. Tax evasion and tax avoidance, a problem which seems to have defied solution, had been deviled the tax system right from colonial times. The impact of tax revenue on nigerian economy case of federal board of inland revenue matthew a. It is the view of many people that the loss of revenue caused by widespread tax evasion and tax avoidance in nigeria is due to inefficient and inept tax administration.
Dec 14, 2016 this study shall set out, a comprehensive analysis of financial crime tax evasionavoidance perpetrated by multinational companies and it will also consider the dark side of professional practice by examining the involvement of professional accountants in facilitating tax avoidance, tax evasion and corruption in nigeria. The study of the effects of tax evasion and tax revenues on economic stabilities in oecd countries mohsen mehrara, yazdan gudarzi farahani. New national tax policy approval in late december 2008 nigeria hg org. The role of multinational companies in tax evasion and tax. Tax evasion may be distinguished from tax avoidancethe reorganization of economic activity, possibly at some cost, to lower tax payment. Impact of electronic taxation on tax evasion and avoidance. While some had blamed the situation on tax authorities for not living up to expectation. Lastly, it has been acknowledged that most avoidance schemes are very complex and their perpetrators are always on the look for gaps in tax systems, hence any avoidance legislation to effectively curb. Tax avoidance, understood as the use of the socalled loopholes in the tax legislation to reduce ones tax payments increasingly tops news charts. Ascertain the effect of tax evasion avoidance on nigerian income generation. To identify the factors or problems militating against the tax assessment and collection in nigeria. While some had blamed the situation on tax authorities for not living up to expectation with regards to tax administration, others attribute it to. O 2 0 effect of tax avoidance and tax evasion on personal income tax administration in nigeria. The effect of tax avoidance on government budget implementation.
To solve the research problem, both primary and secondary data were collected. Tax evasion news, research and analysis the conversation. This is approved for students in accountancy business computer science economics engineering arts. Tax evasion is a deliberate on the part of the tax payers to reduce their tax liabilities through illegal means or an attempt not to pay tax due. Data were collected through documentary analysis, questionnaires and. Tax evasion, tax avoidance and tax expenditures in. Tax evasion may be distinguished from tax avoidance the reorganization of economic activity, possibly at some cost, to lower tax payment. G department of accountancy, osun state college of technology, esaoke, nigeria abstract. American journal of humanities and social sciences 1. A conceptual approach of tax evasion and tax avoidance directly correlated with corruption and shadow economy.
It aimed to give a detailed examination of the effect of tax avoidance on the economic growth and development in nigeria. Effect of tax avoidance and tax evasion on personal income tax administration in nigeria. The problem of tax evasion and tax avoidance in nigeria. A major challenge to government in generating revenue has been the increasing rate of tax evasion and tax avoidance. This research specially focuses on the causes and remedies of. May, 2015 nonpayment of tax by taxpayers in nigeria takes the forms of tax evasion and tax avoidance. Tax evasion affects various sectors of an economy and heaps adverse effect on an economy as a whole. Tax avoidance on the other hand is the legal use of tax laws in order to reduce one. The sampled for the study was taken from ekiti state of nigeria focusing on some banks and the board of internal revenue of the state. The result of tax evasion and avoidance is tax revenue loss which may cause. The tax evasion and avoidance may cause industry dead. Effect of tax avoidance and evasion to the economic. Evasion, avoidance, and real substitution response 1428 1.
The south african gaar is a concoction of gaars from different parts of the world. Pdf effect of tax avoidance and tax evasion on personal income. Lastly, it has been acknowledged that most avoidance schemes are very complex and their perpetrators are always on the look for gaps in tax systems, hence any avoidance legislation to effectively curb tax evasion will need to be revised on a regular basis. Tax sheltering is very similar, although unlike tax avoidance tax sheltering is not necessarily legal. Omorogiuwa 1981 has opined that ineffective tax administration is the main factor responsible for large scale tax evasion in. The most common cause of tax evasion is not wanting to or can afford paying taxes. Free online tool to merge pdf files pdfcreator online.
This chapter presents the study on the impact of tax evasion on revenue collection performance in tanzania. Tax havens are jurisdictions which facilitate reduced taxes while forms of tax avoidance which use tax laws in ways. A widely held opinionviews have it that the taxable adults and establishments in nigeria, evade and avoid tax payment, hence depriving the government of revenue. Tax evasion is the illegal evasion of taxes by dondes, corporations, and trusts. Department of accountancy, nnamdi azikiwe university, awka, nigeria abstract tax is an important avenue for government to raise money in order to finance her projects and programmes. In nigeria, the federal and state boards of inland revenue were responsible for overall administration of the tax in the federal and state governments.
Jun 16, 2017 it is the view of many people that the loss of revenue caused by widespread tax evasion and tax avoidance in nigeria is due to inefficient and inept tax administration. To identify possible effects of the tax evasion and avoidance on the economic development of the country and abia state in particular. The study investigated the impacts of electronic taxation on tax avoidance and evasion in nigeria. Evasion of taxes tempers on the accuracy of microeconomic statistics thus leading to the misallocation of resources needed to stimulate the growth of an economy 4. Effect of tax avoidance and tax evasion on personal income. An empirical study of tax evasion and tax avoidance by. Pdf merger lite is a very easy to use application that enables you to quickly combine multiple pdfs in order to create a single document. Jun 08, 2017 project topic effect of tax avoidance and evasion to the economic development of the nigeria economy 1. Oct, 2014 causes of tax evasion and tax avoidance in nigeria tax evasion according to uadialeet al. To identify possible effects of the tax evasion and avoidance on the economic development of the. Tax evasion is the illegal activity of intentionally not paying taxes or reporting income. The results show that tax evasion and income tax rate has a u shape relationship. That is, as tax rate increase the probability of tax evasion would also increase. The research instrument used in collecting the data was questionnaires and oral interview.
Impact of electronic taxation on tax evasion and avoidance a. This can only be done when corporate citizens pay their taxes and live up to their corporate responsibilities. This study is about the impact of tax evasion on revenue collection performance in tanzania. The effects of tax evasion and avoidance on the nigerian economy abstract this research project is a very crucial study on the effects on tax evasion and avoidance on nigeria economy. This is one of the reasons why the hdi and the educational index of the state are as low as 0. Other sections include statement of the problem, general objective, specific objectives, significance of the study, and limitation of the study as well as delimitation of the study. Omorogiuwa 1981 has opined that ineffective tax administration is the main factor responsible for large scale tax evasion in nigeria.
Suggest possible recommendation and solution for reducing tax evasionavoidance in nigeria. European journal of business and management issn 22221905 paper issn 22222839 online vol. Tax evasion, tax avoidance and tax expenditures in developing countries. This study shall set out, a comprehensive analysis of financial crime tax evasionavoidance perpetrated by multinational companies and it will also consider the dark side of professional practice by examining the involvement of professional accountants in facilitating tax avoidance, tax evasion and corruption in nigeria. It examined specific factors for rising tax evasion and establishing mechanism to curb the problem. This is in a bid to ensure that antiavoidance techniques in south africa are in line with. Another impact of the tax evasion and avoidance to the nigerian economy is the issue of dead industries, occasioned by this unpatriotic attitudes on the part of nigerians. Nigeria reports multinationals tax evasion to global body.
But lets be clear tax evasion is different than tax avoidance. Conceptual background tax revenue mobilization as a source for financing development activities in nigeria has been a. Summary of findings, conclusion, recommendation, bibliography, appendix 1 and appendix 2. The result of the analysis shows tax evasion has significant effect on the economic development of yobe state and it is a confirmation of okafor research. Therefore, tax evasion and avoidance are important factors to be considered as they affect both the volume and nature of government finances which is the key to economic development.
The jurisdiction of these courts should be extended to states to ensure. Tax havens are jurisdictions which facilitate reduced taxes. According to richardson 2008, tax evasion as an intentional, illegal and unacceptable behaviour or activities involving a direct violation of tax law to evade the disbursement of tax. Tax evasion is thus illegal and a criminal offence punishable by fines or even imprisonment. For firs, the regulatory body for tax practice and administration, there is a clear challenge to evaluate strategies adopted thus far in order to plug loopholes in enforcement. Tax evasion and avoidance behaviour of the selfemployed nigerians. Determine the roles of professionals such as accountant in antisocial tax practices in nigeria. This work evaluates the effect of tax avoidance and tax evasion on economic growth and development in nigeria 20062016.
Why avoidance, evasion and administration are central, not peripheral, concepts in public finance 1426 1. Effect of tax avoidance and evasion to the economic development of nigeria project material. Tax evasion and avoidance remains the greatest problems plaguing tax administration in nigeria. Tax evasion is defined as a contravention of tax laws whereby a taxable person neglects to pay tax due or reduces tax liability by making fraudulent or untrue claims on the income tax form. A retrospective view 645 this is true, at least to some extent, with respect to the degree of progressivity of the personal income tax, and even more so with respect to the interface between personal and company taxation and the degree of differentiation of the indirect tax system. Kim 2008 believes that tax evasion is illegal and violation of tax laws, whereas tax avoidance is a legal way of decreasing tax burden. Despite its importance, limited scientific research has been undertaken the assessment of tax evasion practices in tanzania.
However, despite the government efforts to bridle the practices of tax evasion and tax avoidance in nigeria, the problem still persists. Ilaboya and ofiafoh 2014 on their study of tax ratio and output volatility in nigeria sand. Tax evasion and avoidace in nigeria nials discussion. Tax avoidance, tax evasion, tax heavens, illicit financial flows and global tax governance are real buzzwords that have come to dominate current international political and financial domains. Tax evasion often entails taxpayers deliberately misrepresenting the true state of their affairs to the tax authorities to reduce their tax liability and includes dishonest tax reporting, such as declaring less income, profits or gains than the amounts actually earned, or overstating deductions. Tax avoidance, capital flight and poverty in nigeria. Findings from the empirical analysis using kendalls wtest and chisquare test statistics reveal that tax evasion and avoidance have adversely affected economic growth and development in nigeria. Nigeria tax system was identified with many problems, such as tax evasion, avoidance and. Thus, there is greater desire for tax evasion, avoidance. Tax evasion and avoidace in nigeria nials discussion forum. The research instrument used in collecting the data was questionnaires and oral.
The existence of tax evasion and tax avoidance in nigeria tax. However, when there are leakages in tax collection through evasion, no development can take place, thus in most countries where, there is high rate tax evasion and avoidance, it is usually associated with high unemployment. The impact of tax evasion and tax avoidance in nigeria. This brings about reactions from various sections of the economy. American journal of humanities and social sciences vo1. Tanzania one of the important areas where tax evasion has been reported is customs duties. Our pdf merger allows you to quickly combine multiple pdf files into one single pdf document, in just a few clicks. Please, sit back and study the below research material carefully. In the second step, the effects of tax evasion and tax revenues on economic stability are studied. In the following section, some examples of tax cases in nigeria are considered in order to show how mncs and accountants have exploited the ambiguities between tax evasion and tax avoidance for the purpose of furthering their own financial best interests. The effect of tax evasion and avoidance on nigerias.
Chapter 8 tax avoidance and tax evasion iarc publications. The federal republic of nigeria, and all the federated units, that is, all the state governments in the country have deployed various measures, which of course, are commendably, for the purpose of making such that, tax evasion and tax avoidance is curtailed, as well as, minimised in nigeria. I combine time series and across section data for oecd. This research specially focuses on the causes and remedies of tax evasion and avoidance in nigeria. Prospects and impacts of electronic taxation in a developing economy like nigeria. Nigeria cannot and should not be an exception in this regard. Mar 01, 2018 tax avoidance, tax evasion, tax heavens, illicit financial flows and global tax governance are real buzzwords that have come to dominate current international political and financial domains. Laundering money for salinas, bongo, the abachas argentine offshore bank scam of the 1990s, plus a secret. Introduction taxation is machinery or process in which society and communities or group of individuals are contributing into. The distinction between this tax avoidance and tax evasion is that tax avoidance is not considered a criminal offence whereas tax evasion is a criminal offence. Ascertain the effect of tax evasionavoidance on nigerian income generation. The roles of multinational companies in tax evasion and tax.
Many commentators and analyst blamed the situation on the tax authorities, for not living up to expectation with regards to tax administration. An empirical study of tax evasion and tax avoidance. Multinational companies and tax evasion and tax avoidance. While the law regard tax avoidance as a legitimate game and tax evasion is seen as immoral and illegal. Get free research paper on the roles of multinational companies in tax evasion and tax avoidance in nigeria. To analyze the various causes of tax evasion and avoidance 2. This research project is a very crucial study on the effects on tax evasion and avoidance on nigeria economy. Tax evasion and governance challeneges in the nigerian. The study of the effects of tax evasion and tax revenues on. Therefore, this study seeks to investigate the effect of tax evasion and avoidance on nigerias economic growth. This will assist government to make life more comfortable for her citizen.
Income tax evasion and avoidance their causes and remedies nigeria preface revenue generation of our country is mostly based on the income derived from tax, which can either be direct tax or indirect tax. Therefore, tax evasion and avoidance do direct resources with respect to elasticity products demand. This study was designed to identify the effects of tax evasion on government revenue generation in oyo state. Tax avoidance is the legal usage of the tax regime in a single territory to ones own advantage to reduce the amount of tax that is payable by means that are within the law. The choice of this research topic therefore, is because of the ever increasing need to increase the internally generated revenue of states in nigeria to enable her provide her citizens with adequate social and economic amenities. Request pdf the role of multinational companies in tax evasion and tax avoidance. Nonpayment of tax by taxpayers in nigeria takes the forms of tax evasion and tax avoidance. The roles of multinational companies in tax evasion and. University of kwazulunatal analysis of tax avoidance. Wellstructured questionnaires were administered in the target respondents and were analysed using. Chapter five of this effect of tax avoidance and evasion to the economic development of nigeria material is available, order and download full work chapter five of effect of tax avoidance and evasion to the economic development of nigeria contains. Effect of tax avoidance and tax evasion in personal income. Effect of tax evasion on economic development of yobe state.
Effect of tax evasion on economic development of yobe. Uncertainty, complexity and confusion also provide the breeding ground for tax avoidance and evasion. Effects of tax evasion and avoidance tax evasion and tax avoidance has undoubtedly affected adversely the government revenue generation capability and the economy as a whole. Nigerias campaign against tax evasion, especially by multinational companies mncs operating in the country, was taken to the platform for collaboration on tax pct conference in new york.
Whether you need to split a pdf into several different single files or split its pages in a certain interval, all you have to do is upload the pdf file and select the. Tax evasion has been an issue of concern in the nigerian tax system for decades. The case of nigeria tax evasion and tax avoidance reduce government revenues. Suggest possible recommendation and solution for reducing tax evasion avoidance in nigeria.
The study examines the effect of tax avoidance and tax evasion on personal income tax administration in nigeria. An analysis of tax evasion in romania at the present time from the economic, social and political point of view with proposals for improving the fight against tax evasion. Additionally, the evasion of taxes alters the distribution of income in an. This study aimed to assess the extent factors that influence tax evasion a case of temeke municipal council. Nigeria s campaign against tax evasion, especially by multinational companies mncs operating in the country, was taken to the platform for collaboration on tax pct conference in new york. Uniprojects aim of providing effect of tax avoidance and evasion to the economic development of nigeria project research material is to reduce the stress of moving from one school library to. Tax evading attitude is argued to have an adverse effect on governments socioeconomic and political programs.
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