CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Tax can be defined as a compulsory contribution to the support of government levied on persons, property, income, commodities, transactions et. Now at a fixed rate mostly proportionate to the amount on which the contribution is levied (Crowther 1998) as it can equally be confirmed in (Tilley 1981) Oyebunji (2006) identified two major forms of taxes these are:

Direct taxes:   These are taxes imposed by the government on the income of individuals and companies which are usually paid by the person or persons on whom it is legally imposed. Examples are Personal Income Tax (PIT), Company Income Tax (CIT), Capital Gains Tax (CGT), Withholding Tax, Petroleum Profits Tax (PPT), Education Tax and Capital Transfer Tax (CTT). The PPT is imposed on individuals earning, CIT on profits of organization/corporate bodies, PPT on oil purchasing/exploration companies, CGT on profit from sales