In any developed and growing society, the provision of basic infrastructure is of utmost important and necessary, that is why government normally show concern as to how it could access resources to meet this societal needs.
Every responsible government has a obligations to those it governed, and to undertake such obligations, there is need for government to generate funds with a view to carry out its social obligations to the people.
To carry out social services, government need huge resources, as it cannot on its own generate all the funds it needs to meet its obligations hence, the idea of taxation.
However, one of the avenue, in which the government generate funds to meet its demands is through taxation, that is, citizens are taxed, and citizens on their part are expected to carry out their civic responsibility of paying taxes to the government, as part of their contributions to the development of the society.
Unfortunately, tax evasion and avoidance has been the greatest challenge faced in the administration of tax in Nigeria. Apart from civil servants, who earned salaries from the government, most Nigeria citizens pay little or no taxes hence, this has brought about a substantial shortage of government funds to meet its demands.
The cause of this problem has been attributed to some factors, and these include, insufficiencies tax laws, coupled with its complexities thus, the taxpayers have taken the advantage of this problem associated with tax legislations, other problems are in the case of high rates of taxation as well as, lack of sense of civic responsibility on the part of taxpayers.
These challenges remained an issue in the tax administration system in Nigeria, and has defied all efforts to proffer solution to the menace. Although some fellows have blamed the tax administrators for failing to live up to their responsibility, others have also related the problem to the unpatriotic tendencies exhibited by the taxpayers.
Definition of Tax Evasion
Tax evasion is the purposeful and conscious violation of tax legislation with a view to avoid the payment of tax, as it is imposed on the citizens by law made from the tax jurisdiction.
Whereas, tax avoidance is the fraudulent means, whereby the taxpayers seek to subtract or make less every of his liability to tax in such a way that will look as if he is not breaking the tax law. Nevertheless, tax avoidance is a game, considered to be legitimate, while tax evasion is considered illegal and immoral.
This problem of tax aversion and avoidance has been there before now. In fact, it has historical antecedents. For instance, hostile response has been a recurrent decimal when it come to the issue of paying tax.
Many people have mistook tax collectors as nuisance to the society, even some fellows who decided to carry out their civic responsibilities by way of paying their taxes do reluctantly. This unpatriotic tendencies exhibited by the Nigerian citizens, had happened even in the Bible days, where the Jews of those days treated tax collectors with contempt and disdain.
This behaviour continues in modern society, like Nigeria as taxpayers invented several ways to frustrate tax administrators. In my mind, this negative behaviour to taxation is unpatriotic, even after knowing the role that taxation is playing in the Nigerian economy.
Read Also: The role of Taxation in the Nigerian economy
Solutions to Tax Evasion and Avoidance In Nigeria
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.
Fining Defaulters of Tax Law
there are legislations and laws that are bonded on the citizens of Nigeria to pay tax, and as citizens, it is expected of them to carry out their civic responsibilities by paying their taxes otherwise, the defaulters may be fined.
In other words, tax evasion and avoidance is likely to be reduced through fine, so the fine collected from the defaulters will served as deterrent
Punishing Defaulters of Tax Law
Like I said earlier, fine is the best option to reduce tax evasion and avoidance in Nigeria. Even then, what to be measured as fine may not directly be under the control of tax collectors. Violators may be viewed as criminals, and tax evasion and avoidance may be seen as crime and should be punished as crime.
Tax May Be Deducted Before Citizens’ Salaries Are Paid
Should tax evasion and avoidance be eliminated, the Nigerian government should endeavour to make sure that taxes are deducted from every citizen’s salary before he or she received his or her income.
Enforcement of Tax Law
There is need to enforce tax law in Nigeria, if tax evasion and avoidance must be reduced or eliminated. Therefore, the tool of taxation need to be followed, any time tax law or legislation might have been made with a view to averting prosecution and hypositions of penalties.
Other measures are also explained below:
– A good number of these measures, as adopted by the federal government and the state governments in Nigeria with a view to curtail tax evasion and avoidance are contained in several legislations, which, of course, have empowered government departments, government ministries, government agencies and any commercial bank that has any dealing with companies in regards to any kind of business transaction to insist in demanding from such companies tax clearance certificates of, say three years without delay, and the years must precedes the current year under assessment.
More so, similarly, the government has also came up with another measures to minimize tax evasion and avoidance in Nigeria.
This measures is quite commendable, in that, the government has introduced what it called ‘provisional tax’, and this provisional tax is within 30 days by corporate entities, then, the other one is the declaration of interim dividends, which constitutes a commendable anti-evasion endeavour.
Infact, in most states of the federation, this similar anti-evasion measures introduced by the federal government have already been adopted.
Another instances, are that, tax evasion and avoidance measures have taken the form of law or legislation, which has compelled artists and performing musicians to comply with the tax law by paying taxes to the government in every state of the federation, where they are basing before they could be allowed to perform or play their music.
In fact, there is stiff penalties that are imposed to anyone who failed to comply with the directives of the tax administrators and the provision of tax law.
Subsequently, the Nigerian tax laws and legislation are completely filled with measures of punitive momentary and criminal sanctions, all for the purpose of combating the problem of tax evasion and avoidance in Nigeria.
Among several provision of these criminal sanctions is the one enshrined in the Companies Income Tax Act, section 66.
This section has conferred on the Federal Inland Revenue Services all the power it needed to make sure that every defaulting taxpayer’s goods are seized and sold, including, chattels and in an extreme cases, their premises can also be seized and sold, so as to recover any amount of tax money owned by the taxpayers.
Others punitive measure are enshrined in the federal Inland Revenue services Act of 2017.
Tax law should be enforced to compell Nigerian citizens to keep to their civic responsibilities of paying their taxes.
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