Tax Evasion

asionTHE SOCIO-ECONOMIC PROBLEM OF TAX AVOIDANCE AND EVASION IN NIGERIA: AN OVERVIEW Dominic Asada LL.B. (Hons.) B.L, LL.M. Tax Avoidance and Evasion are some of the most perplexing problems facing the nation today. It is widely believed that there is a considerable difference between estimated revenue from taxation every year and what is actually collected. This disturbing aversion to taxation has some historical antecedents. Traditionally, there has always been a hostile response to the payment of tax by the people who viewed tax collectors as a nuisance to the society. And for the few that paid tax, they did so with the greatest reluctance. Even in the Bible, instances abound where the Jews treated the tax collectors with disdain and contempt.1 This negative attitude transcended to modern times and with the consequence that various devises, has been formulated by the tax payers to frustrate the tax authorities. To say the least, this negative attitude to taxation is unpatriotic in view of the well recognised role which taxation plays in the economy. In fact, it is undeniable today that every government depends to a large extent on taxation not only for its socio-economic development but also as a means of ameliorating the existing inequalities of wealth in the society.2 It is in this light that there has been various legislative and judicial attempts to impose liability on the tax payer in appropriate cases. Definition of Tax: The Nigerian tax Acts do not define the word tax. Thus for the purpose of ascertaining its meaning resort has been made to decided cases. It must be quickly pointed out here that even the various judicial attempts at defining it lacked precision. This maybe due to the Myriad function of taxation in the society.

In spite of the difficulty at definition, some definitions proffered by some leading authorities in the field may be examined. In the words of Chief Justice Lathman of the Australian Supreme Court in Matthews v. Chucory Marketing