The research study examining the importance of taxation and problem associated with its collection in Nigeria (A case study of Nnewi North Local Government Area).  The value quality and effect of taxation in the Nation cannot be over emphasized because it is a satisfying collection wants (e.g basic services which cannot e provided) by individuals and for government policies.  The research is the process of collecting relevant information distributed questionnaire as its primary sources of information and the researcher also use textbooks as secondary source of data for study.  There is also the rise tables and percentages used to analyzed the data collected.  The research revealed that the problem of tax collection was due to some factors like high rate of illiteracy, dishonesty among the payers and attendant high cost of tax collection.
  Moreover, those companies that pay tax are not usually honest about their profit because there is no high rate of the incentive. However, based on the findings the researcher made some recommendations.
1.0  Introduction                       
1.1     Background of Study           
1.2     Statement of Research Problem   
1.3     Purpose of Study                       
1.4     Research Question                      
1.5     Hypothesis                         
1.6     Scope of the study              
1.7     Statement of Problem   
1.8     Limitation  of the Study
2.0     Literature Review         
2.1  Administration Structure
2.2  Justification for Taxation
2.3  Requirement for A “Good” Tax                   
2.4  Reasons/ Purpose of Taxes   
2.5  Tax Collection System and Assessment
2.6  Problem of Tax Collection     
2.7  Effect on Demand and Taxation
2.8  Measures of Checking          
2.9  Problems of Enforcement            
3.0  Research Methodology         
3.1  Research Design                  
3.2  Area of Study                     
3.3  Population of Study                    
3.4  Source of Data                          
3.5  Sample of the Study            
3.6  Instrument for Data Collection     
3.7  Validation of the Instrument
3.8  Method of Data Analysis              
4.1      Data Analysis                      
4.2      Test of Hypothesis               
Summary, Findings, Recommendation and Conclusion
5.1   Summary
5.2  Findings
5.3  Recommendation   
5.4   Conclusion           
Tax system in Nigeria can be traced back to the 1904 when it was introduced by Lord Lugard in Northern Nigeria.  Also the native ordinances were introduced in 1917 in Northern Nigeria which later extended to the West in 1928. In this tax system the committees taxed themselves through communal labour to prosecute communities projects or to help the community suppress external aggression.
       Taxation as one of the fiscal operation that carryout many limits of government called in jurisdiction.
       According to Okonkwo, he stated that, the three major fiscal function are: Allocation, distribution and stabilization which has economic reason to the operated by each levels of government.
       This fiscal operation can be traced back to the three region as Nigeria was previously constitution, (example) Eastern, Northern Western regions.  They have various legislature for direct and indirect personal taxes before the Nigeria independence 1960.
       The first tax law in Nigeria came into force in 1961 known as the income tax management Act of 1961.  The existence of the law was due to fact that the ordinance Europeans in the region areas.  Therefore, for this lapse to be ratified, the Rainsman fiscal commission of 1958 recommended that inclusion of the tax law that will provide for the Europeans in regional areas.
       Although (ITMA) income tax management Act of 1961 provided for the taxation of Europeans in the regional areas.  ITMA tried to correct certain issues in Nigeria taxation there were still some anomally.  To amend this, various regions enacted some financial law.  The Eastern Nigeria anected the financial law of 1962 which replaced the direct taxation ordinance Act of 1950.  The western Nigeria adopted the financial law of 1962 of the Eastern region. In addition the Northern Region promulgated the personal tax law of 1962 with similar tax provision as the finance law of 1962 of Eastern regions.  These efforts made by the three regions brought about harmony in taxation laws in Nigeria.  To strengthen the efforts already made by these three region, the federal government promulgated various legislations such as 1979 Act and inclusion of tax matters in the yearly federal government budget.
       The budget is first read through radio and television by the Head  of State to the general public on the 31th day of December proceeding the year of the budget execution.
       Later on ITMA was effectively replaced by the personal income tax decree generally referred to Decree No 104 to 1993.  This personal income tax Act regulate personal income in Nigeria, or machinery  by which communities or group are made to contributed part of their income in some agreed amount and method for a purpose of the administration of the society.
       Tax can be defined as a compulsory levy by government through its agencies on the income consumption and capital of its budget.
       Taxation can also seen as primitive but yet compulsory levy on properties and income of individuals and corporate bodies.  The money realized therefore constitutes part of source of finance for general government expenditure in the economy.
       Another definition by Chief Olorunmeke, tax is a way of making persons, individuals and corporate entities contribute money through legalized levies according to their level of income or some other criteria to a common fund of a community for the purpose or running the affairs of that community or state.     
       Also, is a compulsory levy on individuals and non human e,g company involves transfer of resource or income from private sector to the public in order to accomplish or achieve some of the major economic and social responsibilities taken by the government.  Basically tax can be classified into to major groups namely; Direct and Indirect tax.
       Direct Tax is based on ascertainment of income and the assessment of income either individual or group of individuals.
       According to Osita, he explained direct tax as when the incidence of tax falls on the person assessed and also bears the burden of the tax.  Direct tax has two divisions, the personal tax and companies tax.  The personal tax is for individuals and it is assessed and collected by the state while companies income tax is charged on corporate bodies and that is the responsibility of Federal Board of inland revenue.  On the other hand, indirect taxation is when the incidence of tax falls on the tax payer but the impact of shifted to another person.
       The form of taxation may be progressive,  regressive   or  proportional. In  progressive   taxation, the  tax  rate   increase  as  the actual  amount   of  tax  increase. In   regressive  tax,  the  higher,  the  amount  the  lower  the  rat.  In   proportional  taxation,  the tax  increase  as  in  proportion to  amount   the  taxed.
       many people  seems  not  to  understand  why  tax  should   be   paid  purpose   of  taxation  is to  being’s  about  Nigeria   rate  of  tax  evasion. This imposed numerous  problems  on  them  by  local government .  hence  they  fail  to   understand the  need  and  evade  tax   payment.  Some  illiterates  who  engage  themselves  in one   business  or  the other  do  not  keep  accurate  record   of their  business  transaction  income , thereby  creating   problems  for  tax  assessment .
       some  individuals  lack  means   of  livelihood  and  a  result  of  that,  they  have  inability  to  pay  tax  while some  rich   one’s  keep  wealth  in  form  of   commodities   examples,  commodities   like  gold,  precious   store  ecetera,   thereby  making  tax  assessment  difficult.
the  objective  of this  study  is  to  examine  the  purpose   of  taxation  and  undertake  and  insight  into  the  problems   associated  with  it’s  collection  in  Nigeria.  It is  also  aimed  at  educating  who  believed that   taxes  are  form  of  punishment  to  them. Mina  purpose  of this  study  include  the  followings:
1.     To  identify  the  need  for  taxation.
2.     To    highlight the  benefits  of taxation
3.     To  find  out  the  various  problems  associated  with  tax  collection.
4.     finally  to recommend  ways  to  minimize  these problems
i.  Does  tax  help  to  regulate  the  economic  position of the  local  government
ii.  Does  the  communities  in  your  local  government  derive   jointly  used  goods  and  services  from  tax  payer?  
iii.  Can  in  accurate  records  of  business  transaction  bring  about  a problem  to  collection  of  tax?
iv.  Does  illiteracy  in the communities contribute  to  the  problems   of  collection  of tax  in  your  local  governments
v.  Do  greater  involvement of  people  in  subsistence   production   impose    problem  on  collection  of  tax?
vi.  Can  keeping  wealth  in  form  of  commodities  constitute  a problem  to  collection  of  tax?
vii. Does  dishonesty  on  the side  of  tax  collector’s  hinder  the  effectiveness  of  tax  collection?
Viii.  Do  inadequate  finance  constitute  a  problems  to  tax  collection suffer  humiliation  in the  hands  of  people  in  four  local  government  during  the course  of  collecting  tax?
i.  Hi:  Tax  help  to  regulate  the economic  position of the  local  government.
ii.  Ho yes the communities  in  your  local  government  derive  jointly  used  goods  and  services  form  tax  payment
iii.  Hi:  Yes  inaccurate  records of  business  transaction  brings  about  a problem  to collection  of  tax
iv.  Ho: Yes,  illiteracy  in the community  contribute to the  problems  of  collection  of  tax  in  your  local  government
v.  Hi:  Yes  greater people  involves  in  subsistence  production  impose   problems  of  collection  of  tax.  
vi.  Ho:  Yes,  keeping  wealth  in  form  of commodities   constitute a problem  of  collection of  tax
vii:  Hi  Yes,  dishonesty  on the side  of tax  collectors  hinders   the effectiveness  of  tax  collection.
viii.  Ho:  Yes,  inadequate  finance  constitute  a problem  to  tax  collector  suffer   granulation in  the   hand’s   of  people  in  four  local  government  during  the course of  collecting tax.
       The  research  was  conducted  in  Anambra  state  but  the  actual  study  was  limited  to  Nnewi  North  local  government  area.  It  has  been   carried  out  and  subject  to  some  limitations. It  could  be  worthy  of  mentioning  that  the  researcher  could  not  cover  as  much  areas  as  expected  owing  certain  setbacks  among  which  include;
The  increase   in the  cost  of materials  and  other  things used  to  enhance  research,  and  not  permit   further  research.
 B.     TIME
The time  allocated for the study is  very  short as  a study  academic  work  is  enormous  further  erances  of this  write  up  may  yield  the best.
Unavailability  of  enough  relevant  literature  on  the  subject  matter is based  on  Nigeria  environment  strikes,  there  is a  limitation  to the write up.
 the  nature  of this  study  is to  educate  the  public  on  the need  for tax   payment  so as to  reduce the rate  of  tax  evasion, aversion  and  avoidance.  As  a  result  of the  following  under listed will  benefit  from  the  study.
 i.            The  tax  payer
ii.           The  public
iii.         The  government
The research will  enable   the tax  payer to realized   the  reasons  who  he /  she  should  pay  tax  when  due  and  the  consequence  of  non -  compliance  with relevant tax  law’s.
Again,  the member’s  of the public  who  feel  cheated  about  the  allocation  of  infrastructures  will  find  this   work  very  useful.
Moreover,  the outcome of this  study will be  of  great   benefit  to  the government  in  general  as the  tax  payers  will  start  to  dance to the  tunes  of  tax  laws .  Also  to the public  on the  activities   of the  local  government   tax  collector, which  funds derived  goes  to the  state  government  purse for  construction of infrastructural development of  the  state  etc.
 This  refers  to  one’s  total  refusal  to meet  one’s  legal tax  obligation  eighter by  not  reporting  at  all   to the  appropriate  authority, the  income  or  revenue  of the  period  or  misrepresentation  of  the demand   of  tax  authority .
 This  refers  to the general  human  tendency to  been  stingy  with  money. The  stinginess  will  lead  to  outright  giving  not  pay  taxes  where   it  is  possible
This is  a deliberate  attempt  by  the  tax  payer  to  pay  less than  the surpose   amount   to  pay.   This  is  a legal  means  by  which  the  tax  payer  can reduce  this  burden
  This is  situation  whereby  incidence  of tax  falls on state  and  federal  board  of  inland  revence
 This  on the  other  hand  is  when  the  incidence of  tax  falls  on the  tax  payer  but  the  impact is  shifted  to  another  person.
 vi.        PROGRESSIVE  TAX  
 It  is  the rate  at  which  tax  increase  as the  actual  amount  of tax  increases.
 Regressive taxation  is the tax  rate  whereby, the  higher  the amount  to be  taxed  the  lower  the rate .
 In  proportional  taxation, the  tax  increase  as in   proportional  taxation, the tax   increase as  in  proportion  to  the  amount  of  being  taxed.


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