KIULJ Volume. 4, Issue 2 (2022)


Isau Olatunji Ahmed, Ph.D.


Taxation Tax Avoidance Revenue loss legal mechanisms.

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Legal mechanisms to counter tax avoidance in Nigeria

Abstract: Abstract Taxation is one of the major sources from which the Nigerian government generates its revenue which is by levying taxes on individuals, corporate entities, goods and services. However, over the years, the Nigerian government’s revenue generation efforts through taxation have been hindered and impeded by the issue of tax avoidance. Tax avoidance, alongside other concepts such as tax evasion and tax planning, has been described as fiscal termites eating away the potential tax revenue of government. Unlike tax evasion and tax planning which are generally considered to be illegal and legal respectively, there is no such clear cut classification for tax avoidance thereby posing a serious threat to the government’s revenue generation efforts. The magnitude of potential revenue lost to the menace of tax avoidance necessitated the need for the government to put in place legal mechanisms and measures to prevent tax avoidance. The objective of this article is to examine the concept of tax avoidance and its underlying incentives. The article also examines the impact of tax avoidance and as well as the legal mechanisms to counter it. The article is a library based research that made use of primary and secondary materials such as the constitution, tax legislations, case laws, journal, textbooks, dissertations and theses. The finding of the article revealed that the legal mechanisms to counter tax avoidance in Nigeria are currently inadequate and it recommended that the legal mechanisms be strengthened for them to be effective.