Date of Publication : 10, Aug, 2019
Author: Muhammad Usman
The study aims to evaluate the effect of tax evasion and avoidance on revenue generation in Nigeria. The population of the study comprised of the federal Inland Revenue, central bank of Nigeria and national bureau of statistics of which a period of Ten (10) years was used from 2006-2015. The data generated from statistical bulletin and annual reports of the CBN, FIRS and NBS were analyzed by means of descriptive statistics, and regression analysis using Eviews 8.0. The result of the analysis was tested at 0.05 (5%) level of significance. The findings of the study show that tax evasion and avoidance have significant effect on revenue generation and the Nigerian economy. Therefore, the study recommends that, Government should use media platforms to enlighten citizens on the effects of tax evasion and avoidance on socioeconomic development. Furthermore, tax rates should be reduced to enhance and boost revenue generation which will increase the tax net to capture many individuals and small businesses. Also, the insignificance of penalties and tax authority bearing should also be tackled; Changes in tax legislations should also be communicated to citizens on time via any available media platforms. Qualified personnel should be recruited and trained to enhance the efficiency and effectiveness of tax operations. Also, tax authorities should engage in practices that are capable of attracting public confidence in eradicating the evasion and avoidance of taxes, Staff should be motivated to increase their morale in ensuring the insulation of fraud and corruption from tax operations. For example, good salary package should be designed for tax officials to discontinue corrupt practices. In so doing, evasion and avoidance of taxes will be minimal to ensure the socioeconomic development of Nigeria.
Keywords : Tax, Taxation, Tax evasion and avoidance, Revenue generation,