TAX EVASION AND AVOIDANCE IN NIGERIA
ABSTRACT
This study was carried out with the aim of examining the effect of tax evasion/avoidance in Nigeria. This study made use of primary data to carry out its analysis. The statistical tool Z-test was used to test the hypotheses. This study found out that tax evasion/avoidance was due to reasons such as corruption, lack of proper tax culture, weak legal system as well as weak ethical culture. This study recommends that the issue of ethics should be taken seriously, the citizens should be sensitized on the need to pay tax, a sound legal system should be put in place to enforce tax laws and also that the issue of corruption be tackled adequately.
TABLE OF CONTENT
CHAPTER ONE: INTRODUCTION
1.1 Background of the study    -    
1.2 Statement of the research problem     -    
1.3 Research Objective    -    -    -    
1.4 Research Hypothesis -    -    -    -
1.5 Significance of the study -    -        
1.6 Scope of the study -    -    -
CHAPTER TWO: REVIEW  OF LITERATURE
2.1 Introduction     -    -    -    -    
2.2 Theoretical framework of the concept of tax
evasion and avoidance  -    -    -
2.3 Reason for tax avoidance and evasion     -    -    -
2.4 Modes of tax evasion and avoidance     -
2.5 Empirical analysis of the concept of tax evasion and
    avoidance     -    -    -
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction    -    -    -    -
3.2 Research Design     -    -    -    -
3.3 The population -    -    -    -    -
3.4 The sample and sampling techniques     -
3.5 Data instrument -    -    -    -    -
3.6 Data presentation and analysis     
CHAPTER FOUR: DATA ANALYSIS AND PRESENTATION
4.1 Introduction     -    -    -    -    
4.2 Descriptive statistics     -    -    
4.3 Test of Hypothesis     -    -    
CHAPTER FIVE: SUMMARY, FINDINGS CONCLUSION
     AND RECOMMENDATIONS
5.1 Introduction -    -        
5.2 Summary -    -        -    
5.3 Findings     -        -    -    -    -    
5.4 Recommendation        -    -    -    -    -
5.5 Conclusion     -        -    -    -
Bibliography     -        -    -    -    
Appendix     -        -    -    -    -    
     CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
Tax evasion is an illegal activity undertaken to reduce a person or company’s tax bill (Embaye, et al. 2010). The failure to declare part or all of income to the tax authority is one of the most frequent methods of tax evasion, but other method have also been described. At the other end of the spectrum from tax evasion, tax compliance is seeking to comply with tax law by full disclosure of all relevant information on all tax claims, seeking to pay the right amount of tax required by law at the right time and in the right place (Olamide, F. et al. 2010). The distinction of the tax avoidance and tax evasion was clear before. It was generally known that the tax evasion is an illegal activity. In recent times, the cutoff point has blurred (Speuteles, J. et al 2000). In fact, the tax avoidance is the gray area between tax evasion and tax compliance which means trying to get round the law but not breaking it.
Tax can be avoided for example through changing identity of the person undertaking a transaction, changing of the location of a transaction, changing of the nature of a transaction to sometime different from what it actually is, and delaying recognition of a transaction (Schwarz, 2009). The tax avoidance and tax evasion are two world wide problems that both developed and developing economies are suffering from. This is evident in countries like Poland, Greece, Czech Republic, Russia, Ukraine and even Nigeria. The causes of tax evasion and avoidance are universal. Citizens may avoid tax for a variety of reasons. They include misuse of tax revenue, lack of faith in the government, lack of proper tax culture, the urge to make higher profit, corruption, biased tax system etc.
All these factors above are some of the reasons why people evade tax. Evasion and avoidance of tax is very harmful to any government because those revenue that were lost as a result of the evasion and avoidance would have gone a long way in meeting some of the expenditures to be carried out by the government. The principle source of revenue for any government is tax and as such should be accorded strict and close monitoring and also every leakage and mismanagement inherent in the system should be well curtailed so as to enhance optimal government performance.    
STATEMENT OF RESEARCH PROBLEM
Taxation is an important fiscal tool through which government achieve economic stability. It is an important source of revenue through which government meets the needs of its citizens. Research over the years has focused on the developed countries with little attention paid to the developing countries. In the context of this study, the South Eastern states of Nigeria will be examined, since the larger parts of them are self employed. Arising from this are the following questions:
Will effective tax education help reduce the incidence of tax evasion/avoidance?
What is the relationship between ethics and tax evasion/avoidance in South Eastern states of Nigeria?
Does the legal system contribute to tax evasion/avoidance in South Easter States of Nigeria?
What is the effect of proper tax culture in tax evasion/avoidance in South Eastern states of Nigeria?
What is the relationship between corruption and tax evasion/avoidance in South Easter States of Nigeria?    
 RESEARCH OBJECTIVES
The main objective of this study is to examine the effect of tax evasion/evasion
To examine the effect of education on tax evasion/avoidance in the south eastern state of Nigeria.
To examine the relationship between ethics and tax evasion/avoidance in South Eastern States of Nigeria.
To ascertain the impact of the legal system on tax avoidance/evasion in South Eastern State of Nigeria.  
To examine the effect of a proper tax culture on tax evasion/avoidance in South Eastern States of Nigeria.
To examine the relationship between corruption and tax evasion/avoidance in South Eastern States of Nigeria.
RESEARCH HYPOTHESIS
In carrying out this research on the effect of tax evasion/avoidance in south eastern states, the following hypothesis will be tested.
1. H0: Effective tax education can help reduce the incidence of tax evasion/avoidance in south eastern states of Nigeria.
Hi: Effective tax education cannot help reduce the incidence of tax evasion/avoidance in South Eastern States in Nigeria.
2. H0: There is a relationship between ethics and tax evasion/avoidance in South Eastern States of Nigeria.
    Hi: There is no relationship between ethics and tax evasion/avoidance in South Eastern States of Nigeria.
3. H0: The legal system has an impact on tax evasion/avoidance in South Eastern States of Nigeria.
      Hi: The legal system has no impact on tax evasion/avoidance in South Eastern States of Nigeria.
4. H0: Proper tax culture has an effect on tax evasion/avoidance in South Eastern States of Nigeria.
    Hi: Proper tax culture has no effect on tax evasion/avoidance in South Eastern States of Nigeria.
5. H0: There is a relationship between corruption and tax evasion/avoidance in South Eastern States of Nigeria.
    Hi: There is a relationship between corruption and tax evasion/avoidance in South Eastern States of Nigeria.
1.5     SIGNIFICANCE OF THE STUDY
The tax evasion and avoidance constitute one of the biggest problems militating against effective tax administration in Nigeria. Huge amount of revenue is lost each year to this train devils. This research is carried out to address this issue.
This research work on its conclusion together with whatever solutions or findings will provide answers to some pertinent question as regards tax evasion and avoidance. Different stakeholders tend to benefit from this study. They include.
Government: The government would be able to know why citizens evade taxes and also how effective is its tax administration system.
Tax Officials: It will enable them to devise better ways of collecting taxes and also to know the level of awareness of tax payers as regards tax matters.
Tax payers: This study will reveal to them the reasons why they should pay their correct tax.   
SCOPE OF THE STUDY
This study focuses on tax evasion and avoidance in Nigeria economy. The population of this study comprises of all tax payers and tax authorities in South Eastern part of Nigeria. Geographically, this study is limited to the South Eastern part of Nigeria.
 REFERENCES
Alabi, S. (2001). “Tax planning”. A paper delivered at the workshop on Nigerian corporate and personal income tax management, Yaba, Lagos.
Alm, J. and Martinez – Vazquez, J. (2001). “Societal Institutions and Tax Evasion in Developing and Transition countries”. A paper prepared for public fiancé in Developing and transition countries conference, Georgia state university.
Eboziegbe, M. O. (2007) “Tax evasion hinders local government”. The Saturday Tribune, October, 13.
Kay, G. (1980). The anatomy of tax avoidance in income distribution. Limits to redistribution, proceedings of the 31st symposium of the colstor research society, University of Bristol: John wnle and sons Ltd, pp. 135-148.