Federal Inland Revenue Service (FIRS) and Tax Compliance in Nigeria: Challenges and Prospects

Nigeria is relatively low when compared to Botswana with 35.2%, South Africa at 26.9% and Ghana with 20.8% in terms of level of tax compliance due to corruption in Nigerian tax system has resulted to huge revenue losses emanating from tax evasion and pioneer status granted to foreign investors for the period of five years. The aim of this study is to identify the challenges and prospects of tax compliance in Nigeria. Moreover, the economic deterrence model and Secondary data were used. However, findings from this studies shows that huge revenue is lost due to inability of the Federal Inland Revenue Service (FIRS) to have a detailed numbers of companies that guilty of tax evasion as available record from the Federal Inland Revenue Service (FIRS) shows that there were more than 440,000 companies in Nigeria but only about 120,000 were paying taxes. By implication about 320, 000 companies are yet to be paying taxes to the FIRS. Finally, the government must develop stiffer measures that will serve as deterrence to tax evaders. Also, the FIRS should shortlist names of companies that are evading tax among other measures.