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CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY 
It is not an overstatement that taxation plays a prominent role in the economy of any nation as one of the major means of generating revenue. In the past government derived more revenue from Company Income tax compared to any other sources of revenue but now reverse is the case and this is due to the ineffectiveness of the administrative machinery of Company Income Tax .i.e., Federal Inland Revenue Service (FIRS), the government policy and the conduct of the tax payers. It was also observed by the Federal Inland Revenue Services (FIRS) that many Companies are in the habit of evading company income tax payment and this attitude has slowed down the growth of economy of the nation. However, the various taxes collected by the government particularly the company income tax are used to provide social amenities like water, electricity, good road network, education, health care services and many more which in tum promote the standard of living of the citizens and residents of a nation. Without prompt payment of tax by the companies and other tax payers, the government may not be to fully play its expected roles to the citizens.In many of the developed and underdeveloped countries taxation has been the major source of revenue to the government unlike Nigeria where all attention is being concentrated on crude oil as the major source of income to the government.
Furthermore, taxation is a yardstick by which government regulates production and consumption of goods and this role attests to how taxation contributes to the growth of a national economy but the reverse is the case in Nigeria system. The partial neglect of this source has turned the economy of the country into mono-economy and the revenue from this source can also be regarded to as mono-revenue. In a tax system, the company income tax is a form of direct tax which the taxpayer themselves bear the burden. This is the reason why some companies try to evade the payment of such taxes compare to the indirect form of taxes in which the burden is transferable. This means that the final users of such goods bear the burden of such taxes indirectly. Hence, many companies avoid tax or completely evade tax thereby reducing the total revenue of the government.
1.2 STATEMENT OF THE PROBLEM
In order for government to provide or perform its function to the society, there must be some means of imposing levy on individual and enthies: profit and income, and one of this is through company income tax. In view of these, many business, government and Federal Inland Revenue Service have contributed to the problem being faced .by this source of revenue and some of those problems are:
1. There is no effective and good operating tax policy of company income tax
2. There is no thorough inspection of companies on the relief to be claimed by the Federal Inland Revenue Service.
3. There is no effective 'Communication network between the Federal Inland Revenue Service and Companies.
4. Government does not show full concern to company income tax.
5. There is no severe punishment and fine for company that fails to register, make returns or evade tax.
6. Inconsistent government policy on the administration of company income tax.
1.3 OBJECTIVE OF THE STUDY
The objective of the study is to determine the problem of company income tax administration in Nigeria and the proposed solution or way out to such problem.
1.4 LIMITATIONS OF STUDY
During the course of carrying out this research work, researchers were faced with financial constraint, and this is why it was not possible to travel to other states of the federation where offices of Federal Inland Revenue Service are located to collect some other needed or necessary information. So, the findings were only restricted to the Federal Inland Revenue Service (FIRS) Ikeja branch of Lagos State.
Also, there was problem of restricted information, because some of the staff of the Federal Inland Revenue Service (FIRS), Ikeja was reluctant to fill the questionnaire administered to them while some refused to fill the questionnaire at all
1.5  RESEARCH QUESTIONS
The research work will attempt to answer the following questions:
1. Does the government show full and adequate concern to company income tax as a source of revenue?
2. Is the federal Inland Revenue Service (FIRS) thoroughly investigate the reliefs claiming by the companies?
3. Is there any form of training and seminar for the personnel of Federal Inland Revenue Service?
4. Is the Federal Inland Revenue Service educating and informing the companies at the appropriate time?
5. Is there any good communication contact between the Federal Inland Revenue Service and Corporate Affairs Commission (CAC)?
1. Does the Federal Inland Revenue Service and the government work hand in hands to ensure that new companies and unregistered ones are registered?
2. Is there any penalty or fine for any company that failed to be registered, make returns or evade tax?
3. .Does the Federal Inland Revenue Service ensure prompt collection of tax as at when due?
1.6 RESEARCH HYPOTHESES
Hypothesis one
H0 (Null hypothesis): There is no effective and good operating tax policy of company Income Tax administration in Nigeria.
Hi (Alternative Hypothesis): There is an effective and good operating tax policy of company income tax administration in Nigeria.
Hypothesis two
Ho (Null hypothesis): Taxes collected from companies are not used for economic development of the nation.
H1 (Alterative Hypothesis): Taxes collected from companies are used for economic development of the nation.
Hypothesis three
Ho (Null hypothesis): FIRS and government does not work hand in hands to ensure that new companies and unregistered ones are dully registered with FIRS for tax purpose. H (Alternative Hypothesis): FIRS and government work hand in hands to ensure that new companies and unregistered ones are dully registered with FIRS for tax purpose.
1. 7 SIGNIFICANCE OF THE STUDY
Since this study shed light on the administration of company income tax in Nigeria, the author humbly believes that the study will be of immense benefits to the government and administrative machinery (Federal Inland Revenue Service) in reforming the tax policy. It would also enable the various companies who are paying company income tax to get good orientation on the importance of taxation and thereby stop evading tax.
1.8 SCOPE OF THE STUDY
This study looks at the administration of company income tax in Nigeria. In the light of this, the study will focus on companies within Lagos State. The companies and individual to be covered in this research work include: i. Tax Authority (Federal Inland Revenue Service Ikeja Office, Lagos) ii. Tax payers (Companies) iii. Tax Consultants
1.9 DEFINITION OF TERMS
Tax: It can be defined as money or charged compulsory levied or imposed by a public authority on the income of individuals and companies as stipulated by the government decrees, acts, or case law irrespective of the exact amount of service rendered to payer in return.
Taxation: This is the process or method of calculating and assessing an individual and companies as to the amount to be paid as tax liability.
Administration: This is the part of management which is concerned with the installation and carrying out the procedure by which, the programme is laid down and progress of activities is regulated and checked against plan.
Objective: Objective is an offspring of the mission statement of an organization which entails the breakdown of attainable goals a firm seek to attain and constitute the principal reason for a finn's existence.
Direct Tax: This is a form of tax levied by government on the income and revenue of individuals and companies in which the burden is not transferable. Examples are Personal income tax, Pool betting tax, Capital gain tax, Companies' income tax, Education tax, Withholding tax and Petroleum profit tax.
Indirect Tax: This is a form of tax imposed by the government on the value of goods and services. The incidence of payment falls on the tax payer while the real burden is shifted to the final consumer. Indirect taxes are only payable on consumption e.g. Value Added Tax (VAT), Import and Export duties, Custom duties, e.t.c,
Tax Evasion: This is a deliberate act on the part of the taxpayer not to pay tax due. It is a criminal act under the tax law because it is illegal.

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