1.1 Background to the Study
The issue of tax evasion and avoidance have generated a considerable interest and concern to the governments and finance experts recently; this is because of their socio-economic implications and the effects on government revenues and fiscal viability in the long run. Asada (1997) in Bassey (2014) expressed that the issue of personal tax in Nigeria is being handled with levity hand and it is very disappointing and problematic of all the taxes in the tax system today. In spite of the fact that tax is now being considered as a huge source of generating revenue for government in the place of dwindling oil prices in the international market. A well organized society, say a country or state government owes some fundamental obligations to the people it governs, these obligations are in the forms of provisions of basic social amenities such as good roads, health, security of lives and properties, shelter, good water and others, the citizens on their own part are expected by the government to make equitable contribution in the form of tax. It is against these background that government levy taxes on its citizenry to pursue the above stated objectives it owns to the people.
The claim above suggests that taxpayers over the years have demonstrated unpatriotic act through such means as concealment of profit and inference with revenue agents through corrupt practices, therefore, personal income taxation in Nigeria requires proper handling of the taxation system to ensure that everyone pays his/her tax as at when due. Taxes have period because there is no choice (consider the pay as- you-earn PAYE), due to the requirements of tax clearance certificates and, in most cases because of coercion by the government (use of task force and personnel), as a condition for recurring public sector benefits or social services rendered by the government even before attempting to contest elections, therefore, the desires to uplift one’s society is the first desire of every patriotic citizen, the patristic citizen, however, pay taxes because it is a civic responsibility and for others because they want the government to succeed. This is perhaps due to the fact that the pace of development and growth in any economy is closely tie to taxes compliance rate. Tax payment is a civic responsibility everyone must perform to ensure that government finance or run public utilities as well as perform other social responsibilities. Taxes, thus constitutes the principal sources of government revenue, an effective tax system ought to satisfy the twin purpose of raising maximum revenue and at the same time encourage production. In an effectively managed tax system, the two purposes are not inconceivable provided the beneficial effect of government expenditure and incentives for production exceed the unfavourable effect of taxation. Adinkrah (2011) posited that an effective tax system aside from maximizing revenue for development, ought, if well structured and managed elicit a feeling of common purpose, joint responsibility or obligation amongst the taxable persons in a state or a country.
However, it has been observed that one of the greatest challenges facing the Nigerian tax system is the problem of tax evasion and avoidance, while tax evasions is the unlawful and deliberate violation of the law in order to escape payment of tax which is unquestionably imposed by law of the tax jurisdictions, tax avoidance is the native means by which the taxpayer seeks to reduce or revenue altogether his ability to tax without actually breaking the law. This “Twin devils’ have created a great gulf between actual and potential revenue, the government has for the umpteenth time complained to the widespread incidence of tax avoidance and evasion in the country as companies and other taxable persons employ various tax avoidance devices to escape or minimize their taxes or deliberately employ fraudulent ways and means of evading tax altogether sometimes with the active connivance of the tax officials as pointed out by Likita (2013), since tax is a principal sources of government revenue, if persons are able to escape by legal or illegal means the tax to which they should logical be subject under the general scope of the tax, the theoretical equity of the tax to a long measure is lost. Tax evasion and avoidance is undoubtedly denying the government the tax revenue, which result in huge difference between potential and actual tax collection, the major challenge borders on the collection of taxes particularly from the government officials who always believe they are above the law, and also to the businessmen, contractors, professional practitioners like lawyers, Doctors, Accountants, Architects down to traders. Hence, the poser raise is on the efficiency and effectiveness of Voluntary Assets and Income Declaration Scheme in ensuring effective and appropriate tax payment in Nigeria.
1.2 Statement of the Problem
Nigeria due to her natural endowment in area of crude oil is generally regarded as an “oil rich” nation and everything seems to revolve around it, with national budgets inclusive. This image of being oil rich has made those at the helm of affairs focus on sharing the little national cake rather than focusing on how to bake a bigger one. This result of this is that the tax system has not been working well which makes oil revenue to be the only source of revenue for the government. Take for example Nigeria is produced just over 2 Mbpd as against the United States of America’s over 9 Mbpd. With this, the US do not herself to be an “oil rich” country – this is because, the economy runs on tax revenue, not oil.
In the year 2016, South Africa total tax revenue was about N27 trillion as compared to that of Nigeria which was about N6 trillion total tax collected by all levels of government. Altogether with oil revenue, Nigeria generates about N10 trillion (circa $33B). Even without corruption, this amount is barely enough to fund transportation alone (roads, rail, water and air travel infrastructure and maintenance). So, more than anything else, the problem is that not many of us pay the right amount of tax as required by law. Government upon learning this, they resolve to curb the issue of tax evasion and avoidance. It therefore, came up with what is called Voluntary Assets and Income Declaration Scheme.
1.3 Research Objectives
The general objective or main objective of this study is to examine the effectiveness of Voluntary Assets and Income Declaration Scheme (VAIDS) in curbing tax evasion in Nigeria by using some selected residents in Ota, Ogun State, Nigeria, as a case study. The specific objectives are:

  1. i) To investigate how Voluntary Assets and Income Declaration Scheme (VAIDS) has contributed to effective tax collection in Nigeria
  2. ii) To examine the reasons for the establishment of Voluntary Assets and Income Declaration Scheme (VAIDS) in Nigeria

iii) To identify the benefits of Voluntary Assets and Income Declaration Scheme (VAIDS) to Nigerian government
1.4 Research Questions
The following are some of the questions which this study intends to answer:

  1. i) In what ways have Voluntary Assets and Income Declaration Scheme (VAIDS) has contributed to effective tax collection in Nigeria?
  2. ii) What are the reasons for the establishment of Voluntary Assets and Income Declaration Scheme (VAIDS) in Nigeria?

iii) What are the benefits of Voluntary Assets and Income Declaration Scheme (VAIDS) to Nigerian government?
1.5 Hypothesis of the Study
Ho: VAIDS has not been effective in Curbing Tax Evasion in Nigeria
Hi: VAIDS has been effective in Curbing Tax Evasion in Nigeria
1.6 Significance of the Study
It is vital to know that this research work will generally find solution to the existing and anticipated problem tax evasion in Ogun state and Nigeria at large. It will help the Ogun state government in collecting tax with ease and the taxpayer benefiting from it through provision of social facilities and infrastructures for the state. It will enhance the taxpayers’ understanding that tax payment is a civil duty and is being paid by a patriotic citizen of the state.
1.7 Scope of the Study
This study is designed to examine the effectiveness of Voluntary Assets and Income Declaration Scheme (VAIDS) in curbing tax evasion in Nigeria by using some selected residents in Ota, Ogun State, Nigeria, as a case study. The study will therefore be carried out among the residents of Ota, Ogun State, Nigeria.
1.8 Limitation of the Study
The limitations in this study are the difficulties encountered during the research work. In some cases, the researcher was mistaken for agent gathering information for one panel of inquiry or the other. Also, some members of staff of internal revenue of Ogun State that saw the need for this research and attended to this researcher’s data need do not have access to tax payers’ files and records. The issue of tax causes a lot of friction and reaction from the taxpayer, therefore many of them turn down being interviewed or filling of questionnaire. Some that responded were not educated; therefore there is a need for translation and interpreting of questionnaire to their native dialect before they could respond.
1.9 Definition of Terms
The following terms were used in the course of this study:
Tax evasion: is the use of illegal means to avoid paying your taxes. Tax evasion occurs when the taxpayer either evades assessment or evades payment.
Tax compliance: means making tax payments and producing and submitting information to the tax authorities on time and in the required formats.
Voluntary Assets and Income Declaration Scheme: an initiative designed to encourage voluntary disclosure of previously undisclosed assets and income for the purpose of payment of all outstanding tax liabilities.


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