ABSTRACT
The purpose of this study was to investigate the adequacy in personal income tax system in Nigeria using NIFOR as a case study. Survey research design was employed for the study. The population for the study consisted of both management and non management staff of NIFOR Edo State, Nigeria. 40 staff, members were randomly selected using simple random sampling technique. The instrument used for data collection were questionnaires and interviewers. The hypothesis was tested using Chi square at 0.05 significant level. The study reveal there is adequacy in PIT and it was recommended to improve efficient tax collection.

CHAPTER ONE
INTRODUCTION
A tax is a compulsory levy imposed by a public authority (First-Federal ILAND revenue Service) on the income gains profit and wealth of an individual or a corporate entity for public purpose.
Every nation has a tax policy in places so the Nigeria Government is not an exemption for government to impose taxation. It has some economic as well as social and financial implications.
For instance there are certain commodities which are not to be consumed trade, because it dose not contribute to the development of the economy as well as humanity hence government will places heavy tax and restriction on such commodities and usage. Cocaine and Indian hemp are products which are not encouraged to be produced or consumed hence government do not encourage but impose heavy sanctions on offenders.
Personal income tax (PIT) is a form of tax imposed on individuals who are either in employment (both public and private places) or are running their own small businesses under a business name or partnership. The collection of personal income tax is usually by the federal and state government, though local governments also collect taxes.
It is the responsibility of the federal inland revenue service to collect personal income tax from residents of Abuja as well as what may be described as highly mobile federal workers – staff of the ministry of foreign affairs and other Nigerians and foreigners outside the country byte earning income in Nigeria (Non-resident) expatriate workers residing in Nigeria police and military officers, civilians working in police and military formations.
However, they pay to their respective state of residence. The current law guiding the taxation of personal income tax came into effect in 2004 and it empowered federal and state tax boards to identify persons living in or earning income form Nigeria who by law are required to pay tax. The personal income tax is not adequate enough to cover taxes in Nigeria, self employment in Nigeria (Barbers GSM operators, mechanics spraying painters, market women and men hair dressers hawkers e.t.c) does not account for personal income tax vendors, bus conductors do not pay income can be determined and deducted at source that actually pay tax to the relevant authorities market women and men make profits which are not accounted for because our taxation system is not adequate enough to cover these lapses, where government would have earned huge revenue.
STATEMENT OF THE PROBLEMS
The execution of laudable projects by the federal, state and local governments is a function of adequate and available resources. Access to free health, education, pipe borne water, good roads etc. are the principal responsibilities of the both the federal states and local governments.
The study will attempt to address some of the reasons behind the adequacy of personal income tax and the solutions to be proffered. In view of this, the study intends to find solutions to the following questions
While is taxation not adequate in Nigeria?
What are the steps to be taken to ensure adequate tax system is in place in Nigeria?
Does Niger tax meets with international standards?
How will the relevant tax authorities harmonize effective tax system?
Are there relationships (positive or negative) between tax policies and the general economy?
Has taxation contributed progressively or retrogressively to individual tax payer and or also corporate bodies?
What are the economic, social and financial indications to show that question 6 above have been answered.
Has adequacy in personal income tax guided governments and tax authorities to stamp out frauds, illegal collection by tax officers?
SCOPE OF THE STUDY
The area of importance as far as this write-up is concern is to study and explore ways of putting and efficient and effective tax policies in place at NIFOR.
OBJECTIVE OF THE STUDY
Any study without a clearly defined objective is baseless and worthless.
In view of the above fact, this research must be viewed from two basis points. At one end is the issue of taxation – “adequacy of personal income tax” and of the other end is the resultant use – economic purposes. Therefore the research objectives include the following.
To explain the nature and the need for taxation
To explore possible ways in-which an effective taxation system can be put in place
To conduct an investigation into taxation system n Nigeria and to suggest ways to enhancing an effective tax system.
To find out if it is the usual practice for taxation information can be analysed for the purpose of providing a sound but reliable taxation system in NIFOR
The objective is also to find out if the management of NIFOR relies on the taxation system in place for effective decision making.
To find it there are other possible ways of taxation, that will be beneficial to the management of NIFOR
To proffer solutions to the above problems
To ascertain if due diligence has be followed when operating personal income tax in NIFOR.
SIGNIFICANCE OF THE STUDY
Personal income tax is a topical as far the collection of revenues are concerned. The federal states and local governments need funds to execute projects that will benefit the lives of the people, hence a means of getting these revenues became important. However, the main purpose of taxation is to determine whether appropriate and effective taxes has been effected by federal, state and local government.
The study will also benefit tax authorities consultants and constitutions. For instance there is the chartered institute of taxation any study matters will institute an asset to them the federal inland revenue services (firs) and also the governments in their fiscal planning measures.
Finally, the research work is expected to contribute to the existing knowledge that has been in place as regards tax policies.
1.6 RESEARCH HYPOTHESES
A hypotheses is a statement of facts that has not been proved rather it is assertion or an assumption. For this research study the following statement of hypothesis shall be tested for validity.
(H0) – Shall be used for null hypothesis
(HF) – Shall be used for Alternative
Hypothesis 1
HO: Adequacy in personal income tax will not solve the problems of tax evasion by individuals and corporate entity.
HF: Adequacy in personal income tax will solve the problem of tax evasion by individuals and corporate entity.
Hypothesis 2
HO: Adequate tax policies alone will not solve the problems of taxation in Nigeria
HF: Adequate tax policies will solve the problems of taxation in Nigeria.
Hypothesis 3
HO: Adequacy in personal income tax is not a panacea to the issue of corrupt tendencies by individuals and corporate bodies.
HF: Adequacy in personal income tax is a panacea to the issue of corrupt tendencies by individuals and corporate bodies.
1.7 RESEARCH METHODOLOGY
As a result of the nature of the study primary and secondary data will be used. The primary data were collected trough the use of questionnaires administered to staff of NIFOR in addition to the above personal interviews were conducted the secondary data will be sourced from text books annual reports and accounts of NIFOR the internet will be another source of secondary data. In testing the
hypothesis stated above the research will use the statistical techniques called CHI-SQUARE other tools available to the research are regression analysis and correlation co-efficient.
1.8 LIMITATIONS TO THE STUDY
Like every work of this nature the study suffered several limitations. There limitations vary in different stages and forms.
Firstly the study is limited by time and data, one to time constraints the data and information used are not al products of primary research but are largely published information obtained from books articles, financial statements and statistics of government departments and agencies. Secondly there was this reluctance on the part of some respondents as well as officer of the company who were unwilling to divulge official information also hindered the free access of information.
Again certain records are not available and enough to give useful information to the researcher.

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