1.0 INTRODUCTION:
1.1 BACKGROUND OF THE STUDY:
Man, no matter his religion or creed, had always lived communally. In every society, there has been one form of levy or the other imposed on the people from time to time to generate enough resources to improve their well being.
Fundamentally, however, it is of course a compulsory levy (tax) on income since the decision to pay tax is not that of the taxpayer. No rational human being would subject his earnings to tax. People pay tax because the law so stipulates. Also, it is the same fact that make people to look for ways and means bring down their taxable income and consequently their taxes from time to time.
The problem of capital formation in the underdeveloped economies as it relates to public finance, breaks down into three main parts. The first concerns the financing of social overhead investment, which must be undertaken directly by the government. The second deals with an intermediate zone in the actual investment projects are on private hands but the funds are made available through government finance. The third deals with the necessary incentives to private investment both domestic and foreign as they are influenced by taxation and other fiscal.
In the above three categories, government effect is directed towards maximizing savings, mobilizing them for productive investment and directing them so as to serve the purpose of a balanced development program. Taxation is this, a system of moving resources between the different segments of the economy. Whenever tax matters are in discourse, it pre-supposes the existence of government, which is higher authority that controls the actions of the rest of people by imposing taxes on them. To this end, tax is a universal liability and one cannot avoid payment of tax just by avoiding the use of any amenity built with tax money. It is essential therefore for one to understand that some amenities have exclusionary factors. Once cannot say, for instance, that he does not want to benefit from National defence and security. Hence, tax is levied universally to provide such facilities. This is unlike health services, electricity or water supply, which have exclusionary factors. One can always avoid paying water or electricity bills just by abstaining from their consumption.
Furthermore, it is impossible to amounts of benefits derived by a National defence as against that derived by B. in order to ensure equity, therefore, A and B should pay the same amount as tax. The generally determinant of the amount payable by each will not be their personal income. Lawal (1982) said it should be realized that most countries today, the government has become the greatest spender of money. Taxation has not only influenced the economy of the country, it has also become one important instrument of economic policy. This an increase in government spending (tax money) rightly involves a corresponding decrease in individual spending.
The Enugu State Board of Internal Revenue is the department charged with the responsibility of tax collections. This board itself is an annex of the state ministry of finance and Economic Development and utilization of tax revenue. The board of Internal Revenue has powers to assess and subsequent collect taxes from persons, institutions and organizations which Enugu State which is with the exception of limited companies, members of the armed force the police force etc which are within the Federal Government exclusive list.
In less developing economy like Nigeria, the government is finding it increasingly difficult to marched the necessary resources in the right point in time. In underdeveloped economies, tax resources account for about 10 to 15 percent of national income while it goes up 30 to 40 percent in advanced countries. It is thus, common knowledge that the less developed country is, low ratio of tax payments to national income. Hence, the following conditions must exist to ensure efficiency in income taxes.
(a) Existence of money economy.
(b) High standard of literary among taxpayers.
(c) Proper accounting record of tax proceeds.
(d) Voluntary compliance by taxpayers.
(e) Political stability.
(f) Honest administration of tax revenue.
The above-mentioned conditions are often lacking in many cases. In essence, if a tax system is seen to be effective, it pre-supposes that an efficient and self-accounting structure has been put in place to ensure maximum benefits.
However, in as much as the government may levy some taxes to check excess spending by individual (i.e. by reducing their disposable income), such funds may later be disbursed as loans for private capital formation in a turn around objective of the government to promote investment in some preferred sectors such as agriculture, commerce and industry.
In general, government expenditure is largely a function of the tax. The common economic theory known as criteria paribus (other things being constant) do not have much relevance in taxation because any slight change in tax pattern brings about great changes in the nations economic life. Other things can never be constant when taxes are increased, individual spending would reduce, drastically. There is likely going to be disserving among the people. Prices of goods and services (especially those duties are increased) are likely going to rise. There would likely, be more government spending, otherwise a surplus would result.
Some classical economists believe that there is no budget or deficit that result from tax increase because an increase in form of tax. For instance, in 1995 federal government budget in Nigeria reduced the personal income tax rate to between 10% to 30% from the former rate of between 10 to 35% but this has been composted for by the introduction of value added tax (VAT). This, as the government closely watches the economy and formulates tax policies that will be best if distributed income as well as raising capital for further investment, also do investors and managers of industries who find the rate too high, look for “safer” areas to invest their money, thereby paying little or no tax. In this connection, unless there is attitudinal change among the Nigerian population in regard to taxation, tax may not attain its pride of place in the revenues of the government even in the next decade. To achieve this change, it is critical that government programs should be no course to reassure the people.
Furthermore, tax policies should be formulated in a way to encourage private initiative in commerce and industry.
Another problem in taxation in public should receive our due civil obligations especially taxes. It has now gotten to a stage where the government employs the services of armed soldiers and even price fighters to do the job of tax collections so as to crush the resistance of tax defaulters. But people should not wait to be coerced before they perform their public duty, or are tax collections expected to flax their muscles at them. How could we make the equation balance? Even civilization has not given the towns people the needed education on the purpose to taxation.
In principle, all adults from the age of 18 years are liable to tax, but in practice, it is only those that have known sources of income that the law expects to pay. However, every adult is a political taxpayer and is consequently to pay tax as away of encouraging people to work for a living. But the absence of reliable statistics on the people is having debilitating effect on government tax program.
Every year, budgets are drawn within, having a reliable estimate of expected tax revenue.
Nevertheless, tax is still expected to improve the economic life of the nation. Again in an economic, such as where propensity to consume is far greater than the propensity to save taxation is expected to play a prominent role in the area of private capital formation for technological development.

1.2 STATEMENT OF THE PROBLEM:
A good number of government projects over the years have been abandoned because of reasons, which are not clear to the citizens of Enugu State. Some of the projects include road, water and electricity. Ore recently, civil servants in the state have not been receiving their salaries as at and when due. The non-payments of salaries have caused untold hardship to those groups of workers.
Inquires as to the causes of the uncompleted projects, non-payment of salaries etc have received conflicting answers. The government claims that the citizenry of Enugu State reluctant to pay their tax. In Enugu State, civil servants are about the only group who pay their taxes as at and when due.
In view of the above elected reasons, the researcher was prompted to conduct this present researcher study aimed at determining the various reasons why the government do not collect enough revenue which will assist her in providing these essential services to the people of Enugu.

1.3 THE PURPOSE OF THE STUDY:
This study has under listed objective.
(a) To educate the people especially rural predominantly illiterate population the need to pay taxes.
(b) To advise government on the proper management and utilization of tax revenue.
(c) To advise government on the way by which tax revenues can be improved upon without causing unnecessary distortions in the private and public sectors of the economy.
(d) To assess the tax collection machinery of the government with a view to measuring their success for failure potentials.
(e) To act as reable literature to students pursuing careers in taxation as well as acting as handbooks to teachers of taxation.
(f) To provide managers of industries and commerce with data for making decision regarding taxation.

1.4 SIGNIFICANT OF THE STUDY:
It is hoped that the study will be of immense assistance to:
(i) The government to see the need to carry the people along in planning the programs and projects to be executed with the tax money.
(ii) It is expected that collectable revenue from taxation will rise, if the government would fully implement the recommendations of this study.
(iii) Perhaps with the enhancement of government. It is hoped that the study will be valuable to the tax management, as it will enable them to be aware of the several techniques available with which they can use to utilize the tax revenue in their organization.
To the government, the financiers, the revelation because it will expose the obstacles and limitations of the techniques of management and utilization of the tax revenue being apply by one organization which they utilize. It is also believed that if effective techniques are used in management and utilization of tax revenue, every naira spent by the government will yield a naira worth of social benefits. Thus the government objective of tax revenue for all the years might be a reality.
For citizen, who pays tax the study will enable them to believe the justification of the taxes, which they paid as they will enjoy optimum social benefits for every naira levy.
Finally, this research report will enable students of management especially Accountancy Student to have an in depth knowledge of the techniques of utilization, tax revenue available to non-profit making organization especially those funded and controlled by the government. For the student of accountancy, this research, project will help them to understand the audit of government organization when the government relinquishes such audit over to certified public accountants.

1.5 RESEARCH QUESTIONS:
The researcher carried on to the extent of interviewing some personnel in Enugu State Internal Board of revenue to acquire fact concerning the management and utilization of tax revenue in Enugu State.
An attempt was made to find solutions to the following questions.
(i) How is the tax collection machinery in Enugu State at question?
(ii) Are the amenities provided by the government in comparison to tax collector?

1.6 RESEARCH HYPOTHESIS:
Ho: Tax Collection machinery in Enugu State at present is in adequate.
Hi: Tax collection machinery in Enugu State is adequate.
Ho: The amenities provided by the government in comparison to tax
collector are not commensurate.
Hi: The amenities provided by the government in comparison to tax collector are commensurate.

1.7 SCOPE OF THE STUDY:
Scope and limitation of the study; when embarking on a case study like this or any research work of that matter. It is proper to be liberal in data absorption because any information you got could be critical to the study. For this purpose, this study was intended to cover all the tax units, agencies including zonal tax offices in Enugu State to give a clear picture of the study.
However, due to time financial and administrative constraints, the scope of the study was limited to Enugu State Board of Internal Revenue Headquarters situated at the secretariat Enugu.
Furthermore, the senior and junior staff of the board, tax collectors and selected tax payers were interviewed.

1.8 LIMITATION OF THE STUDY:
The research earlier had the intention of covering all the government owned revenue expenditure in the Eastern State of Nigeria, however, time and financial constraints have hindered this intention. The study is limited to board of internal revenue Enugu.
It is believed by the researcher that the techniques used by these revenue expenditure closely approximate general practice. The accuracy and effectiveness of the report is hindered by lack of earlier studies on the topic. This made the review of related literature very difficult the researcher had to reduce some of the technique applicable from the work.

1.9 DEFINITION OF TERMS:
Payee: Pay as you earn income tax on wages and salaries deducted periodically as income tax. It is a good example of convenience.
Import Duties: These are duties that are levied on imported items.
Export Duties: These are goods that are levied on exports.
Exercise Duties: These are known as those duties imposed on goods and services produced and consumed locally.
Value Added Tax: This is an indirect tax. It is a consumption tax. The different between sales and profit is known as VAT. Vat is comprises of output vat which are vat chargeable to goods and services while input vat are those vat chargeable to goods and services that are purchased but on vatable persons.
Vatable Persons: This is an importer, it can be an individual or group
Input vat – purchasing
Output vat – selling
Convenience: Taxes should be collected at a time convenient to the taxpayers.
Incommensurate: This means not of size, importance and of quality. That is to say that, the amenities provided by the government are not of size, importance and of qualify. The government should try as much as they can to make it commensurate.
Property Tax: This is known as tax levied on certain types of property such as land and building.
Tax Incidence: This is the burden of tax responsibility that falls in the individual, institute or organization paying the tax.
Tax Evasion: This is a criminal act because the offender makes false claims and declarations to the tax authority so as to pay tax.
Tax Avoidance: It is known as the legal organization in order to minimize their tax liability.
Tax Payer: The payer is the individual, institution or organization that has the duty to pay tax.