According to Azubike (2009) defined tax administration as a major source of government revenue that all over Nigeria governments uses to proceeds to render traditional function of law and other which defend against external and internal aggression regulations trade and economic justice.
Musgrave also included that the economic effects of tax of micro effects on distribution of income and efficiency of resources used as well as macro effects on the level of capacity output, employment, price and growth. He further included that the instrument of fiscal policy cannot be possible “except effective and efficient government tax planning and administrative machinery is been ensured in the country”.
In my own view, tax administration can be defined as the management, direction and application of the internal revenue of the law of conduct in Nigeria.
Tax itself can be defined as a compulsory levy or contribution from workers to a state, which is deducted from every state worker’s salary monthly or a levy paid by traders, hawkers, service delivery agents and other revenue generating sectors.
For instance, considering the state I come from – Akwa Ibom State, the state government deducts a little percentage from workers’ salaries for the infrastructural improvement, development and maintenance of the social amenities.
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In this article, we are going to outline and discuss briefly on four major challenges of tax administration in Nigeria; these are:
- Lack of Effective Administrative: Most tax authorities (especially the state and local governments) lack the desired capacity in terms of payment of salaries, staff recruitment and other funding.
- Lack of Human Capacity: The relevant hands to administer the tax collection and management efficiently in the state.
- Corruption: Some of those in charge of tax collection and administration are often found wanting as they do not channel all tax collections to the proper tax account but rather indulge in corruptible practices.
- Lack of Equality: The tax today is paid by only the employees (which are they government workers mostly). Most highly placed personalities in government and other government immune people are not bound to pay their tax or taxes. This defeats the aim of generating tax for development of a particular country, state, region or community.
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Prospects of Tax Administration in Nigeria
We will also duel on four major prospects of tax administration in Nigeria; they are:
- General Service: This has to do with the benefit of tax that yields government with revenue.
- Fairness: This must be ensured to maintain in accordance to the sources of tax income through enacting new and amending existing tax laws.
- Forceful Action: This should be employed to stable the leak of revenue especially on goods and services as well as unpacked items.
- Sufficient and Effective Policies: Government on various levels should ensure that the domestic firms have the ability to compete with their foreign trade accordingly.
In conclusion, tax administration is the useful ingredient or source of income to the modern economies and different governments in Nigeria or any other country, state, region or economy.