Legal Solutions to The Dilemmas in Enforcing Income Tax Regimes in Nigeria©

International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue I, January 2022 | ISSN 2454–6186

Legal Solutions to The Dilemmas in Enforcing Income Tax Regimes in Nigeria©

Prof. Peter Agbo Ocheme, Christiana I.Agbo-Ejeh
American University of Nigeria, Yola, Nigeria

Abstract
Taxation for any society, including Nigeria, is an indispensable means of economic development. Developing countries can attain economic development through marshalling internal resources by enforcing tax policy constructively. Nevertheless, there is hardly a voluntary yield to each call for tax payment either by the individual or a corporate organization. Piqued by the dilemma of involuntariness in income tax extraction or payments, this research embarked on the doctrinal investigation of the Law (statutory and and others) to understanding the amplitudes of easing such dilemmas. This paper contends that Nigerian income tax systems are principally meant to fund government projects and expenditures rather than instruments for socio-economic improvements. This realization breeds not only distrust as between the taxpayers and the tax collectors, but discourages the voluntariness in disclosures of taxable incomes and distortions in real collections and related statistical records There are number of other reasons discovered by the research as impediments to efficacious income tax regimes in Nigeria. Some of these are lack of adequate logistics, undue political interference, slow judicial process, bribery and corruption, unskilled, poorly motivated staff, and sheer ignorance. The Paper provided suggested changes in legal and non-legal approaches, especially with respect to socio-political and fiscal polcies over which the tax-payers’ monies were to be applied. The paper concludes that trust in tax authority would increase if there is internal and external institutional integrity, thereby minimizing tax payment defiance in the country.

INTRODUCTION

It may sound elementary, yet it is necessary to say that taxation in any society, including Nigeria, is indispensable for economic development. According to Wilford and Wilford, third world countries can attain economic development through marshalling internal resources by enforcing tax policy constructively. As was aptly opined in earlier work , there is hardly any government today that does not rely on taxation for development . From another clime , the U.S. Supreme Court held taxation to be one of:
…great powerful machinery upon which the whole national fabric is based. It is as necessary to the existence and prosperity of a nation as it is the air he breathes to the natural man. It does not only have the power to destroy, but also the power to keep alive .

In the views of Jean Baptiste Colbert, taxation does no more than to “pluck the maximum amount of feathers from the goose with the least amount of hissing” . Since the advent of modern democracies, there has been a global realization that taxation is indeed a manifested instrument that, if used sensibly, could help each society attain its economic and social goals. In all ramifications, taxation can be used to uplift the welfare and living standard of the citizenry, put smiles on the faces of the governed without losing its traditional grip of revenue generation, and has a potent effect in restructuring an ailing economy such as Nigerian.
Yet, there is hardly a voluntary yield to each call for tax payment either by the individual or a corporate organization. Even Government departments, for whose operational survival requires the remission of taxes by all concerns, hardly remit the monthly deducted taxes from their respective employees to the central treasury of government. It is not unexpected that the legal and /or social responsibilities for complying with taxation have not always been ordinarily discharged in Nigeria . As a matter of fact, taxpayers often exhibit indifferent attitudes, and if not complete apathy, to tax payment . The reasons for the pervasive weak tax compliance are not farfetched. It is believed that Nigerian income tax systems are only meant to fund government projects and expenditures rather than instruments for socio-economic improvements . Other reasons are lack of adequate logistics, undue political interference, slow judicial process, bribery and corruption, unskilled cum poorly motivated staff, and sheer ignorance, to mention but a few . In other words, there is a lack of internal and external integrity. Institutional integrity in the context of this paper means that the tax system is well organized and coherent at the internal level, and the tax collection achieves its purpose. The external integrity aspect of tax means the extent to which the general public perceived the tax authority as performing its duty with a sense of purpose, carrying out its operations competently, reasonably and justly with awareness of and consideration for those affected by them .
Therefore, it goes to logical reasoning why Governments at all levels put up all manner of legal and institutional frameworks to ensure high-yielding revenue generation and impose tax schemes that require mandatory enforcement strategies to compel obedience to it. The process is referred to as enforcement procedure. It is a fundamental imperative of a good tax system because it constitutes a benchmark for measuring effective tax administration standards. The income tax laws prescribed various mechanisms for the enforcement of income tax. Therefore, this paper takes a critical look at the legal framework governing enforcement of income tax and the challenges they pose for sustainable development in Nigeria. The paper highlights the components of the income tax enforcement instruments principally to fizzle out their legal deficiencies and their misapplication in practice.
The rest of the paper is rendered in three major parts: the part that clarified the technical terms in the legislative frameworks and mechanism for the enforcement of Income Tax in Nigeria. This part equally took a cursory examination of the history of tax administration in the country. The subsequent part explored and analized tax recoveries by Distress, as well as other legal procedures for enforcement of tax compliance in Nigeria. The last part highlighted the major findings of such loopholes and ineffcciencies relating to Income Tax Adminisrtration, and provided suggestied remedies before concluding.

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