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CHAPTER ONE

INTRODUCTION

BACKGROUND TO THE STUDY

A well organized society, say a country or a state government owes some fundamental obligations to the people it governs.  These obligations are in the forms of provisions of basic social amenities such good roads, health, security of lives and properties, shelter, good water etc. The citizens on there own part owe the government by making equitable contribution in the form of levy on tax.  It is against these background that government levy taxes on its citizenry to pursue the above stated objectives it owns to the people. “Tax according to C. S. Ola is defined as: “non punitive yet compulsory levy on the income and properties of individuals and organizations by government and which it does not account for, the proceeds from the levy on trade the government uses to pursue the accomplishment of some social, economic and political objective in the interest of it’s citizens”. However, another  school of thought maintain that though tax is non-punitive but compulsory an efforts should be made to pay as little possible with the frame work of the law thus engaging in legal tax evasion.  Thus has led us on one of the most universal social malice effecting the proper administration of government at various levels. This tax evasion and avoidance which is the subject matter of this work.  The acid rest of an efficient government is its ability to generate sufficient revenue to finance its enormous expenditure, and all things being equal tax should be in the forefront in government revenue generation, but on the contrary tax has always contributed miserly to government revenue.  Undoubtedly there has been the after math of excessive tax evasion. Empirical evidence have shown that the unco-operative and unprogressive attitude of our citizenry towards tax payment result in major financial problems of government. Obviously it is an agreed fact, that payment of taxes is among the basic things needed for the survival of any society.  In a State such as Enugu the need for an effective tax assessment and collection cannot be over-emphasized. The government is at a major transitory strategy her quest for industrialization and provision of amenities for her citizens. The hall mark of technological advancement, economic growth, social satisfaction, the people’s needs and value to the society center exclusively by within the ambit of taxation.  Also the increasing impact government is making in Economic development is such that it requires substantial financial assistance from every individual in the society. This phenomenon therefore presupposes a qualitative and practical approach to a good system of base administration and collection.  Admittedly, negative attitudes of the populace especially in the payment of tax have resulted in tax evasion and tax avoidance.  Tax evasion is capable of pulling down a well organized government. Again on this background, it is the considered intention of the researcher to verify and ascertain to what extent tax evasion exist in Enugu State and its impact on the totally generated tax revenue.

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