TAX AVOIDANCE

This research investigates the effects of tax evasion and tax avoidance on Nigeria’s economic development, focusing on how these practices undermine government revenue, fiscal stability, and national growth. Taxation remains a major instrument for resource mobilization and economic management in developing nations, yet Nigeria continues to struggle with low tax compliance and weak revenue performance. Despite multiple tax reforms and the introduction of modern administrative frameworks, the Nigerian economy still suffers from pervasive evasion and avoidance, largely driven by legal loopholes, corruption, and ineffective enforcement mechanisms. The study adopted a survey research design, using structured questionnaires distributed to 100 staff members of State Boards of Internal Revenue across the six geopolitical zones of Nigeria. Data were analyzed using descriptive statistics and Chi-square (X²) tests to determine the relationship between tax evasion, tax avoidance, and economic development. The key variables examined included loopholes in tax laws, government spending perception, effectiveness of tax audits, and the impact of lawmaking and tax administration. Findings revealed that tax evasion and tax avoid ance have significant negative effects on economic development. Specifically, legal loopholes in tax legislation, weak enforcement capacity, and poor accountability in the use of public funds contribute to persistent revenue losses. Respondents also indicated that inadequate taxpayer education and corruption within taxagencies fur ther erode public trust and compliance. Consequently, the government’s ability to
finance infrastructure, healthcare, education, and other developmental programs is severely constrained, leading to economic stagnation and increased inequality. The study concludes that curbing tax evasion and avoidance is essential for achieving sustainable development in Nigeria. It recommends that the government strengthen its legal and institutional frameworks, digitalize tax administration processes, enhance transparency in public spending, and intensify taxpayer enlightenment campaigns. Furthermore, the study suggests stronger collaboration among tax authorities, financial institutions, and international bodies to curb profit-shifting and illicit financial flows by multinational corporations. Implementing these measures will promote voluntary compliance, increase revenue generation, and support inclusive economic growth in Nigeria.

The primary aim of this research was to assess the impact of tax evasion and tax avoidance on revenue generation in Nigeria. The study examines the relationship between tax evasion, tax avoidance, total revenue generation and the Nigerian economy. The research design adopted in this study was the survey research design; primary data were collected through the use of questionnaire. Secondary data was also supplemented with primary data.The findings revealed that a significant relationship exists between tax evasion/avoidance and their contributing factors. It was also found that tax evasion and tax avoidance have a significant impact on revenue generation in Nigeria. The study therefore recommends, that the tax authorities should properly review and improve their assessment and collection procedures. It was also recommended that the tax authority’s audit unit should be made stronger to regularly check and verify the tax payments collected by officials at all levels