Accounting Project Topics

Effect of E-taxation on Government Revenue in Nigeria

Effect of E-taxation on Government Revenue in Nigeria

Effect of E-taxation on Government Revenue in Nigeria

Chapter One

Objectives of the Study

The study has both general objective and specific objectives. The general objective or main objective of this study is to investigate the effect of e-taxation on government revenue in Nigeria by focusing on the pre-post analysis of taxation in Nigeria. The specific objectives are:

  1. Determine if the high e tax rate causes tax evasion
  2. Determine the implication of e tax evasion on Enugu state government revenue?





Taxation is a burden borne by every citizen to sustain her government in provision of services to the people they governs. The definition of taxation by Farayola (1987) is that taxation is one of the sources of income for the government, such income used to finance government expenditure and improve economic development. Ochiogu (1994) defined tax as a levy imposed by the government against the income, profit or wealth of individuals and corporate organizations.

According to Adams (2001) taxation is the most important source of revenue for modern governments, it typically accounts to ninety percent of government revenue or more. Taxation is seen by Aguolu (2004), as a compulsory levy imposed by the government through its agencies on the income, consumption and capital of its citizens. These levies are made on personal income such as, salaries, business profits, interests, dividends, discounts and royalties. Afuberoh and Okoye (2014), taxation is a civic duty which imposition is expected to yield income which should be utilized in the provision of amenities, both social and security and sustains economic well being of the society.

Tax according to Omotoso (2001) is a compulsory charge imposed by a public authority on the income of individuals and companies as stipulated by the government decrees, acts or case laws irrespective of the exact amount services rendered to the payer in return.

In the view of Uduimbo (2008), taxation is regarded as the most important source of government revenue. They further stressed that public fund is always regarded as taxpayers money. This is because payment of tax is one of the duties of every citizen.

Ogundele (1999), taxation is a process in which society and communities or group of individuals are contributing into an agreed sum which is important for the resolution, development and administration of the public. Apere (2003) notes that taxation is a macroeconomic and fiscal policy instrument which involves the transfer of resources from the private to the public sector for the accomplishment of economic and social goals.  It is an instrument used by the government to measure, access and control the informal sector that dominate dominating econo-mies of the world. Soyode and Kajola (2006) defined tax as an obligatory exaction of money by a civic authority for public determinations and prosperity. Taxes are essential contributions levied by the government on citizens and corporate institutions for the provision of public expenditure Nightingale (1997). From the definitions of taxation given by different scholars, it is noted that the main objective of taxing citizens is to generate revenue for the government for funding its expenditures.


Taxation has been defined by Agyei(1983)as the transfer of resources from the private sector to public sector in order to accomplish some of the nation’s economic and social goals. This definition underlines the main purpose of taxation, i.e to raise revenue to support the cost of services provided by the state. In addition, to the above, other purpose of taxation could be summarized as follows.

1To amass production in the nation.

  1. To increase the amount of revenue collection.
  2. Improvement in government welfare
  3. Improve mass employment.
  4. Induction of modern technology into the system


The general acceptable classification is direct Tax and Indirect Tax.

  1. Direct Tax: This is a tax gotten directly from the person who will bear the burden of it. It is tax directly collected from the income of the tax payer Agyei (1983). He also noted the types of direct tax which are discussed below.





In this chapter, the methodology and the research design that was used in data collection and analysis will be discussed. The chapter will also describe the location where the study was carried out, sample and sampling procedure. The research instrument that was used and how it was administered will also be discussed.

 Design of the Study

The study adopted survey research design to obtain information from the sampled respondents selected for the study. The choice of this method is because of its reliability in obtaining primary information from the respondents necessary for the study. The analysis of which brings about clear solution to the problem of the study.

Source of Data

The data used for this study were obtained from primary source of data. It involves gathering data from the original source. Which this study adopted questionnaire in gathering information from sampled respondents.

Population of the Study

The population of the study covers all taxpayers in Enugu urban and all staff of state board of internal revenue of the state. The target population is 70 employees of state board of internal revenue and 3000 taxpayers in Enugu Urban which include traders, commercial drivers, accountants, and doctors, making it a total population of 3070.




This chapter deals with the presentation, analysis and interpretation of data collected from the respondents in the course of carrying out the research. The responses were converted into scores and percentage distribution.





This chapter deals on the summary of the findings, conclusions of the study, recommendation, suggestions for further studies.


The study concludes thus;

E tax evasion reduces revenue generated by state government and also leads to debt accumulation as well as budget deficit. It was also concluded that e tax evasion which could be caused by high tax rate, inequitable distribution of amenities, lack of strict penalty cause e tax evasion and absence of spirit of civic responsibility also leads to poor infrastructural development.


The following recommendations are made for this study.

  1. From the result, high tax rate statistically causes e tax evasion, I recommend that concerted effort should be made by the government to block all loopholes which lead to e tax evasion so as to promote increase in revenue generation that will boost the economic growth in the long run.
  2. Since e tax evasion has statistical implication on Enugu state government revenue, government and other relevant agencies should promote the effort made towards preventing e tax evasion in the state so as to enhance increase in government generated revenue.

Area for Further Research

The following areas are suggested for further research:

The researcher suggest that other researchers should focus on other aspects of taxation since this study dealt on e-tax evasion, its likely causes, consequences and ways of controlling its occurrence.

Other aspects of taxation such as tax administration, types of taxes and its contribution to economic growth and development should be focused on by other researchers.


  • Adabisi, J.F. & Gbegi, .D. (2013). Effect of tax evasion and tax avoidance on personal income tax administration in Nigeria. American Journal of Humanities and Social Sciences, 1(3),  63-67.
  • Adams, C. (2001). For good and evil: The impact of taxes on the course of civilization .U.S.A: Madiso Publishers.
  • Adegbie, F.F. & Fakile, A.S. (2011). The impact of tax evasion on federal government revenue generation. Ican Journal of Accounting and Finance,1 (3),75
  • Afuberoh, D. & Okoye, E. (2014). The impact of taxation on revenue generation in Nigeria: A study of federal capital territory and selected states. International Journal of Public Administration and Mgt. Research, 2(2), 22-47.
  • Aguolu, O. (2004). Taxation and tax management in Nigeria (3rd ed.). Enugu: Meridian Associates.
  • Agyei, K. E.(1983). Principles of Personal Income Taxation. Lagos : Lagos West Africa Book Ltd.
  • Ahmed, Q.M. (2010). Deterrminants of tax buoyancy: Empirical evidence from developing countries. European Journal of Social Sciences, 13(3),408-414.
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