CHAPTER
ONE
INTRODUCTION
1.1 Background to the Study
The development of any nation depends to a large
extend on the amount of revenue generated and applied by the government on
public infrastructure for the benefits of members of that society. According to
Appah (2010), the development of any nation depends on the amount of revenue
generated by the government for the provision of infrastructural facilities.
However, the revenue and expenditure gap (R
Osiegbu, Onuorah and Nnamdi (2010), the complains of
the government in Nigeria is that the statutory allocation to the various tiers
of government is not enough to carry out effective administration as well as
finance capital projects. Kiabel and Nwokah (2009) reported that the increasing
coast of running government organizations coupled with dwindling revenue has left
various government organizations in Nigeria with formulating strategies to promote
and improve the revenue base. Hence, one very important strategy that can be
applied to increase the revenue base of both federal and state governments in
Nigeria is the promotion of Tax Compliance and Revenue Generation through
effective Tax Audi in Federal Inland Revenue Service (FIRS) for the citizens of
Nigeria.
Non-promotion of Tax Compliance or non -compliance
is a problem affecting the growth, development of tax and revenue generation
through effective tax audit. Ola (2001) stressed that non-promotion of tax compliance
is a great disservice to and a betrayal of the tax administrative and revenue generations.
It should be seen by citizens of Nigeria as an unacceptable behaviour and an
act of economic sabotage. Therefore, in order to safeguard tax administration
and sustain the confidence of taxpayers, promotion of tax compliance and
revenue generation through effective tax audit programme has to be installed to
monitor and detect the non-compliance traits in Nigeria (Ola, 2001; Appah,
2004; Kiabel and Nwikpasi, 2009; Appah, 2010).
Azubike (2009) noted that an effective tax audit system is an opportunity for the
government to collect additional revenue needed in discharging its present obligations.
Okezie (2003) stated that a tax is a burden which every citizens must bear in
order to sustain his or her government thus enabling that
government perform certain basic functions to the benefit of those it governs.
Taxation is a compulsory levy imposed on a subject or upon his property by the
government to provide security, social amenities and create conditions for the
economic well-being of members of any particular society (Ola, 2001; Appah,
2004; Nwezeaku, 2005; Aguolu, 2007).
Promotion of Tax Compliance and Revenue Generation
through effective tax audit is a veritable and sustainable source of revenue
for government and a tool for fiscal policy and macroeconomic management Alli, (2009).
It is on this background that this study is been
carried out to examine “Promoting Tax
Compliance and Revenue Generations through Effective Tax Audit”
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