Nigeria introduced e-tax to aid effective taxation of some online businesses. This study evaluates E- TAX revenue for the period 2009 to 2013. The objective of this study was to evaluate the effects of E- TAX on government revenue and come up with a model for predicting E- TAX revenue financial years 2009 to 2013. The analysis showed that E- tax reforms have a significant effect on E- TAX revenue. This implies that the growth in E- TAX revenue during the period of study was accounted for by implementation of the reforms. In the E- TAX revenue equation, the independent variable is the revenue collected and the dependent are reforms on E- tax which are online filling of returns,E- tax returns and integrated management system

This study provides decision makers with an analytical framework which can be used  to estimate the associated revenues for a E- TAX in Nigeria and guidance to policymakers  in countries planning to introduce a E- TAX. It identifies the tax reforms on E- TAX   which when properly understood, documented, and captured in relevant tax revenue models, would make it possible to estimate accurately E- TAX revenues within a specified period of time. Although past studies advocated for raising rates within the existing system as the most obvious approach for increasing revenues, policy makers should note that this study finds that the decision has the effect of reducing E- TAX revenue. The study also contributes to the existing literature on the E- TAX structure in Nigeria and stimulates further research in the area of E- TAX. Researchers should study the effects of E- TAX reforms on tax revenue.




1.1      Background to the Study

It is obvious that the Nigeria’s revenue from oil can no longer fully support her development objectives due to the serious decline in price of oil in recent years which has led to a decrease in the funds available to the Government. Therefore there is the need for government to generate revenues internally to help finance her public expenditures. This need underscores the eagerness on the part of government to look for new sources of revenue or to become aggressive and innoE- taxive in the mode of collecting revenue from existing sources. One of these existing sources is taxation. To help the government to achieve better revenue collection, there is a need for her to introduce a better and convenient way to collect tax for her citizens which is through electronic taxation.

Taxation is considered to be a means of generating revenue by government for the purpose of providing essential amenities for her citizens (Okauru, 2014). Taxation globally, is a function of reciprocity (Okauru, 2014). While the government is responsible for the empowerment of the citizens through the provision of jobs, infrastructure and other development projects, and in return, citizens are usually expected to perform their own obligations, in which the principal of it is payment of taxes (Okauru, 2014). Revenue generated from citizens’ taxes are usually recycled by the government in the area of provision of basic amenities such as pipe borne water, road network, electricity, schools, and the likes (Okauru, 2014).

The reality on ground in Nigeria is that governments at all levels have to put more efforts by embarking on an aggressive tax drive, when we consider the dwindling revenue profile resulting from the fall in oil prices. Therefore, Nigerians have to come to terms with the present reality. Taxes can be in various forms, ranging from personal direct tax, indirect tax, income tax, value added tax and companies income tax, to mention but a few. In order to bridge the gap in terms of revenue accruals, there is the need for government to embark on aggressive taxation which is the most recognized and plausible means of generating revenue for social services across the globe. The Vanguard of December 15th, 2015 indicates that revenue accruable from Value Added Tax (E- TAX) from March to June 2015 came to about N376 billion, but this figure doubled between July and December.

The reason for this can be traced to the Federal Government’s effort towards diversification of revenue sources in the country. With compulsory tax laws and enforcement, there is no doubt that Nigeria can stand the test of the uncertainties in the international oil market. This implies that there will be availability of more revenue for the government to cater for the needs of the Nigerian citizens. This is the most suitable time for Nigerians to welcome the tax system with open arms. Through this, Nigerians can be involved in the contributory social contract by paying their taxes regularly knowing that the government on its part would observe its obligation by not looting or misappropriating taxpayers’ money.

It is no longer news that Nigeria has finally lost its position as the main supplier of oil to the United States of America and therefore, needs to embrace revenue diversification which can be achieved through taxation as the alternative means of revenue generation in order to withstand the dwindling revenue from oil. However, there is the need to harmonize the tax system and ensure collaboration between government tax agencies and professional tax institutes and consultants. The reliability of the institutional framework for tax processing and enforcement must not be questionable to ensure sustainable development through taxation.

1.2      Statement of the Problem

According to Lolade (2005) the main function of taxation is to generate money for government expenditure. According to the Nigeria National Tax Policy (2012) taxes helps the government in generating sufficient resources for government to provide basic public goods and services. Nigeria has yet to rip the full benefit of taxation as experienced in developed countries of the world. In fact, Ayua (1996) observed that the problem with Nigeria tax administration is grossly inefficient with respect to its procedures, machinery and approaches adopted in collection of taxes, alongside the corrupt practices of tax officials in implementing tax system. Moreover, Ayua (1996) also opined that the Nigeria tax system is grossly inadequate as it is characterized with tax evasion, avoidance and record falsifications which account for the consistent low tax yields.

Careful obserE- taxion points to the oil boom which has been an enduring blessing to Nigeria which regrettably brought about a great shift of attention to oil money, which results to a total neglect of other sectors including agriculture in Nigeria. The adverse effect of this boom and euphoria led to the neglect of other sectors from which revenue can be generated by the government to provide basic amenities for her citizens. One of the best ways the government can use to generate revenue during this period of dwindling of oil revenue is through tax. Unfortunately, this has been neglected by the government. Unless aggressive tax system is being introduced by the government to ensure the citizens pay their taxes as at when due, Nigeria will remain in this economic shackles for long.

Over the years, revenue derived from taxes has been very low and no physical development actually took place, thus the impact on the poor is not being felt. Inadequate tax personnel, fraudulent activities of tax collectors and lack of understanding of the importance to pay tax by tax payers are some of the problems that we are currently facing in ensuring effective tax revenue in the country. Therefore, this study will throw more light on the effect of e-taxation on government revenue in Nigeria by focusing on the pre-post analysis of taxation in Nigeria.

1.3   Research Question

This study will be carried out to answer the following questions:

  1. What are the effects of e-taxation on government revenue in Nigeria?
  2. What are the measures taken to attain proper use of e-tax revenue

1.4   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. i) To examine the effects of e-taxation on government revenue in Nigeria
  2. ii) To identify the measures taken by the government to ensure effective and prompt e-tax payment by tax payer in Nigeria

iii) To investigate the challenges facing taxation systems in Nigeria

1.5   Research Hypothesis

The followings are the research hypotheses to be tested in this study:

H1: Efficiency and effectiveness of e-tax administration has no significant effect on revenue generation

H2: There is no significant relationship between tax payers’ enlightenment on payment of e-tax and revenue generation

1.6   Significance of Study

The results from this study will educate the stakeholders vested with the management of Nigeria’s economy and the general public on how huge revenue capable of replacing oil revenue can be generated through taxation and its effect on national development. Findings from this study will also educate the government of Nigeria and the general public on the effectiveness of the institutional framework saddled with the responsibility of collection and enforcement of tax duties. This research will be a contribution to the body of literature in the area economy, accounting and public administration thereby constituting the empirical literature for future research in the subject area.

1.7   Scope and Limitation of the Study

This study will cover the process of e-taxation in Nigeria. It will as well cover the activities of the tax collection and enforcement officers.

1.8   Limitations of the Study

The Major Limitations of the study will be:

Cost Limitation: There will be a cost limitation. This means that the researcher will not offer any gift or monetary incentives for the respondents to answer the questionnaire. This might result in certain prospective respondents choosing not to respond to the researcher. Time Limitation: There are two types of time limitation that will be faced during the study. The study will be done for a period of four weeks. Hence the results would reflect the impact of the time constraint. The insights of the respondents will be observed during the period of the study. A more extensive study conducted over a larger time period or during a special period of time like when there will be higher numbers of issues, can include insights from respondents over a broader time period and can bring in further depth into the research.


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