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LEGAL IMPLICATIONS OF TAX AVOIDANCE AND TAX EVASION UNDER THE NIGERIAN TAX REGIME
Abstract: Modern governments need money to facilitate economic growth and development. Without any doubt taxation is the mainstay of government revenue. The revenue generated by the government from taxation forms a major source of finance to the nation’s capital expenditure which is crucial to sustainable economic development. One of the objectives of the Nigerian tax system is to provide the government with stable resource for the provision of public goods and services. A major challenge to the government in generating this revenue has been the increasing rate of tax evasion and tax avoidance by citizens who are the main stakeholders. While some have blamed the situation on the tax authorities for not living up to expectation with regards to tax administration, others attribute it to the unpatriotic attitude of the taxpayers. It is in the light of these perplexing issues that this article examines the legal implications and the incidence of tax avoidance and tax evasion under the Nigerian current tax regime. The result of tax evasion and avoidance is the loss of huge revenue needed for development, and which may also hamper the proper performance of the public sector, thereby threatening its capability to finance public expenditure. It goes further to examine the factors that influence tax evasion and tax avoidance in Nigeria, and recommends that tax authorities should organize educative programs to enlighten tax payers on the different laws guiding the Nigerian tax system, the need for the payment of tax and the effect of non-payment of tax, and the implementation of some of the provisions of the newly enacted Finance Act.
Keywords: Tax, Tax Avoidance, Tax Evasion