AN EXAMINATION ON THE IMPACT OF TAX MONITORING IN THE PREVENTION AND DETECTION OF TAX FRAUD IN NIGERIA

AN EXAMINATION ON THE IMPACT OF TAX MONITORING IN THE PREVENTION AND DETECTION OF TAX FRAUD IN NIGERIA

BACKGROUND OF THE STUDY

Taxation is not a novel concept either in Nigeria or anywhere else in the globe. Taxation was practised in Nigeria long before the arrival of colonial men or the British. In fact, it predates both of these groups. The process through which the government imposes a mandatory charge on all of the income, commodities, services, and assets of people, partnerships, trusts, executorships, and businesses may be referred to as taxation (Allingham, 2022; Alm, 2022). One of the most important sources of revenue for any and all governments is the income tax. The fact that the services paid for with the taxes that were collected are given back to the taxpayer is an important consideration in the budgeting process for the federal government in Nigeria. Over the course of the years, this has either supported or discouraged certain activities in the private sector; however, this relies on whether the policy of the government is geared toward discouraging or fostering such businesses (Andreoni, 2021). In the majority of nations, the concept that taxation is a highly significant instrument for national development and progress is widely accepted. It is seen as a significant vehicle for the state's long-term development of its infrastructures, and this notion has garnered widespread support. Opportunities for taxpayers to violate tax laws are expanding as a direct result of the growth and increasing globalisation of businesses (including the increased mobility of capital and the rise of e-commerce). As a result, the Internal Revenue Service (IRS) must continually update and broaden the strategies it uses to deal with this problem in order to meet the challenges it faces (Beck, 2020).

Tax fraud happens when a person or corporate entity knowingly and purposefully falsifies information on a tax return in order to reduce the total amount of tax due. This may happen either by an individual or by a business organisation. Cheating on a tax return in an effort to reduce or evade one's total tax liability is the core of the criminal act known as tax fraud. Claim bogus deductions, claim personal spending as company expenses, or fail to declare revenue are all examples of tax fraud. Other types of tax fraud include filing an inaccurate return.

The great majority of economically developed nations have a wide base for both direct and indirect taxation, meaning that the vast majority of its inhabitants and businesses are subject to some kind of taxation. In contrast, developing nations face challenges on several fronts, including the political, the administrative, and the social, while attempting to construct a robust public finance system. As a direct result of this, developing and rising nations are more susceptible to tax fraud operations conducted by individual taxpayers and companies. This might be regarded one of the key causes for the vast discrepancies between industrialised nations and developing countries in their respective abilities to mobilise their own resources (Becker, 2022).

It is not simply the duty of those in positions of power within the tax system to investigate, detect, and eliminate tax fraud, as well as to ensure that it cannot occur again. It is exceedingly difficult to uncover illicit tax malpractice and illegitimate personal gain without the help of the general people operating in high risk sectors. Therefore, it is up to all levels of hierarchy in public institutions to create an atmosphere of transparency, ethical conduct, and accountability in order to ensure proper handling of the very important issues of preventing, detecting, and handling cases of tax fraud among general taxpayers. This will ensure proper handling of the very important issues (Bergman, 2022).

In accordance with the theory, tax fraud is defined as a method of evading taxes on purpose, which is a criminal offence in most jurisdictions. In the context of taxes, the word "tax fraud" refers to a variety of illegal activities, including the submission of knowingly false claims, the production of forged papers, etc. The term "sanctions" may refer to either civil or criminal consequences.

Finally, the money that is created by the government as a result of taxes is a significant source of financing for the federal government's capital spending, which is an essential component of long-term economic growth. The rising incidence of tax fraud offences perpetrated by taxpayers as well as tax officials presents the federal government with a significant obstacle on its path to achieving its revenue goals (Beron, 2021).

Therefore, tax fraud and other related tax offences are important factors that need to be considered because they affect both the volume and nature of government finances, which is the key to economic development. Because of this, tax fraud and other related tax offences are important factors that need to be considered.

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