Deterrent Tax Fraud in Nigeria: A Causal Factor and Conceptual Review

Deterrent as punishment to tax fraud is an age long tool correcting tax offender and ensuring prompt response to payment of tax levies, as it were from inception tax fraud is astronomically on the increase rather than declining. The aim of this paper was to assess the role of deterrent on tax fraud in Nigeria. The study attempts to review components of tax frauds applicable to deterrent as punishment on tax defaulters or culprits. The paper presents detailed analysis of tax evasion, avoidance and causes of tax fraud with possible reasons responsible for taxpayer declines to file in tax obligations as oppose to willingness to pay. Specifically, it supervene major inherent problems and lukewarm attitudes of government inability to mitigate tax levy into responses and outcomes. Hence, demystifies credible and genuine reasons for or toward tax revenue realizations, responses and outcomes. Moreso, the paper identifies basis for future research, expanded the scope of study and highlighted relevance arguments among reviewed related theoretical issues using a causal factor and conceptual approach thereby involving survey of literature to bring relevance issues to the fore as oppose to the aforementioned nomenclatures. Essentially, various tax penalties ensuring defaulters is punishable relative to the proportion of offenses involved were discussed. Thereafter, pass on to overhaul prior studies, gaps in reviewed prior studies and domesticate the study on relevant deterrent school of thoughts. It therefore, concludes that Tax fraud may not have an end in Nigeria, if those saddled with the responsibility of tax all-encompassing, inclusiveness, delivering tax-welfare to taxpayers are seen not transparent, accountable, sincere, sensitive to the plight of tax payers, and devoid of skirmishes as well as translating taxes revenue into responsibility. However, propose that deterrence is not anylonger the way to go, having tossed both sides of the divide, exigency of time have to take precedence; and allows civility, novelty, automation and all-inclusiveness muster and remediate tax fraud in Nigeria.


Introduction
In the world over, government require funds to finance its operations and policies. Government undertakes huge public expenditure on behalf of its citizens and the populace for the provision of basic amenities and other social services [1] , and welfare. The need for tax payments has been a phenomenon of global significance as it affects every economy irrespective of national differences. [2] However, one of the ways opened to government to raise or perhaps drive the needed revenue to Felix Ogbeiyulu  economically active population at about 65million and so even with the rising numbers of taxpayers, yet less than 30% of the estimated numbers is paying taxes BBC News. [8] One of the reasons for this has been attributed to poor tax compliance, the lack of compliance to the provisions of tax laws indicates that taxpayers are evading taxes, and which is the most critical challenges to tax administration. [9] Furthermore, BBC news adds that in 2017, the country offered a 12 month amnesty for Nigerians to declare and pay taxes on all previously undeclared income and assets to avoid penalty payments and possible prosecution. However, the World Bank reported a year after that it was partly successful with just 8% of the target achieved at the end of the amnesty period. This poor compliance behavior has been captured in literature as the "compliance Puzzle" and is a challenging phenomenon experienced across countries, especially the less developed economies. [10] Tax payment is not for the direct exchange of good and/ or services but a transfer of resources and income from the private sector to the public sector in order to achieve some of the nation's economic and social goals. [11] The Guardian News has noted that sequel to the Nigerian Government announcement of a new $ 3billion credit line from the Bretton Woods Institutions to overhaul electricity infrastructure in the country, the former Executive Chairman, Federal Inland Revenue Service (FIRS) Tunde Fowler has said that Nigeria loss about $ 15 billion to tax evasion annually. [12] From the forgoing, vast percentage of useful revenue is constantly lost to tax criminality on daily basis despite array of weapons at tax authority disposal. [13] Suffice to say corruption, coercion and all other vices and who is involved as it were applicable in some less developed countries hampers deterrent measure to compliance. Therefore, deterrence as the product of the probability of being detected concludes that the size of the fine imposed determines the amount of income [14] invaded. In view of that, [15] has agreed that in Nigeria, there are indications that the institution of governance at all levels is entangled in a web of public distrust and declining public confidence. [16] However, this paper attempts to conceptualize causal factor of major components of tax fraud and the role of deterrent in curbing and ameliorating tax as age long tool of tax fraud in Nigeria as well as government insensitivity and cruel policy toward taxpayers.

Concept of Tax Fraud
Tax fraud is a menace and great losses to government revenue and economic progress. Any individual, group of individuals or company agents involve in tax fraud perversely defrauding government on tax returns commits fraudulent acts. Fraud is an activity that occurs with the context of socio economic interaction and has serious implication for the economy, organizations and people. [17] Therefore, fraud does not include the thought of money related gain, although it may be characterized as enveloping a wide variety of corrupt, misleading, untrustworthy or exploitative practices. [18] Over the years, Nigerian government has loss staggering sum of over $ 17.8 billion on tax fraud according to Enwegnara on the Guardian Business News. [12] Generally, fraud has been defined as an intentional perversion of truth for the purpose of inducing another, relying upon it to part with some valuable thing belonging to him or to surrender a legal right. [19] Umanhonlen noted that fraud is a major saboteur to economy which poses serious threats to the integrity of legitimate business, institutions and to the safety and prosperity of private citizens and communities. A global phenomenon and has resulted to major drawbacks to social justice, political dynamism, economic prosperity, institutional shocks, bankruptcy and failure to potential economic output. [20] Accordingly, [21] described fraud as an act of deliberate deception with the intention of gaining some benefits, that is, acts of dishonestly pretending to be something that one is not. [22] noted that it is a false representation of a matter of fact whether by words or by conduct, false or by misleading allegation or by concealment of that which deceives and is intended to deceive another so that he/she shall act upon it to his/her legal [23] injury. submit that deliberate act of omission or commission by taxpayers and failure to pay tax, submit returns, omission of items from returns claiming relief for instance in personal income tax, imaginary kids, either filling in children that do not exist at birth, understating income, documenting fictitious transactions, overstating expenses, and failure to attempt or answer queries constitutes tax fraud or criminal acts under the tax laws. Tax fraud occurs when an individual or business entity willfully refuses to file in correct returns, intentionally falsified information and presents fraudulent records in order to bypass, avoid or limit the amount of tax liability.
Tax fraud essentially entails cheating on a tax return in an attempt to avoid paying the correct tax obligations [24] . Tax fraud is a global phenomenon and challenges, According to [12] , Fowler highlights that these challenges offer a global response to issues of international tax avoidance; tax evasion; illicit financial flows; money laundering and other harmful tax practices based cooperation and use of advanced technologies to tackle them. [25] subsume that tax fraud is very prevalent in the Nigeria concept, it has cost the government billions of Naira, and the cost of tracking tax fraud has further constitute cost to the government. Tax fraud entails cheating on a tax return in an attempt to avoid paying the entire tax obligation. Thus, occurs when an individual or business entity willfully and intentionally falsifies information on a tax return in order to limit the amount of tax liability. They noted for example, that claiming false deductions, changing personal expenses as business expenses, and not reporting income for tax assessment or purposes. Claiming personal expenses as business expenses and not reporting income is a fraud. Fraud is an activity that occurs with the context of social-economic interaction and has serious implication for the economy, organizations and people. [17] Tax aggressiveness can degenerated into tax fraud. However, [26] admit that it is a step or actions taken by management to reduce tax expense which may be legal or illegal depend on the extent the manipulation of tax expense is done within the ambit of tax law. It is seen as the legal use of the tax regime to own advantage, to reduce the amount of tax that is payable by means that are within the tax law. Though, it is within the jurisdiction and of law but the extent at which the fines will try not to pay reliable taxes is the incidence of fraud. It interchangeable or tax sheltering, hence, for the purpose of tax management, companies do trade off the marginal benefits of tax savings against the marginal costs of managing taxes. [27] Often, the marginal benefits of tax aggressiveness in form of cash saved accrues largely to resources owners, and marginal costs of managing taxes by Felix Ogbeiyulu  way of time, efforts and reputation which are mostly borne by managers. Shareholders normally have the preference that managers be involved in more aggressive tax in that through it revenue accruable to the government are transferred to them and thereby prompting and promoting wealth maximization goals of the firms. [26]

Concept of Tax Evasion
Tax evasion has adverse effect on government [3] revenue. It is a serious menace, a problem to socio-political and economic growth and progress of Nations that yearned for development. Tax evasion is an economic sabotage. Tax evasion has adverse effect on government revenue. [3] Define [28] it as a deliberate and willful practice of not disclosing full taxable income in order to pay less or evade taxes. Tax evasion is used when efforts of individuals and organizations are directly involve toward dishonest, and intentional concealment of facts and figures in order to avoid or reduced tax payable. [29] Describe [30] tax evasion as a deliberate and willingly practices of not disclosing complete taxable income in order to pay lesser tax. [31] Adds [32] that the most common form of tax evasion in Nigeria is through failure to render tax returns to the relevant tax authority. A tax evader may be charge to court for criminal offences with the consequent fines, penalties and at times imprisonment being levied on him for evading tax. [33] Have seen tax evasion as one of the major social problem inhibiting development in developing countries and eroding the existing welfare state in developed economies of the World. This has led to a growing attention among policy makers, western countries, international agencies and scholars. However, tax cut is a fraud, which retarded government policy financing, and it is serious offense, dilution and systemic problem to economic emancipation, when citizens fraudulently dodges payment of taxes or down file-in tax returns for assessment. Tax fraud is upheaval, of no sense anddemeaning to evade taxes. [34] describes it as a situation whereby a tax payer out rightly refuse to pay tax or tries illegal way to minimize his tax liability. Thus, the refusal to pay taxes is a fraud and deceit. The deliberate attempt or act of refusing to declare all sources of income when filling tax liability or returns, or understating income tax return (CITN, 2014) is tax evasion and fraud against the state. [35] Posit that peculiar tax fraud is either in full or partial. It is full, when a citizen who is qualified to filing returns for tax purposes refuse to register to payment of tax, while partial is when tax payer manipulates tax income in order to reduce tax burden. [36] Explain [37] that tax evasion in most developing countries is so rampant and worrisome. He noted that the scenario is much worsened by the day, and with the fact that not many of those governments have made an effort to measure the ethical reasons while tax payer gives such excuses. Therefore, admitted that the extents of this problem, at the same time analyze its impact on tax revenue should be verified. Otherwise, when revenue is require to smooth operation and it cannot be raised, this countries often time tend taking option of increasing tax rates or raided existing tax payers or borrowing which may not only crowd out the private sector or their economies which also may hand them in debt trap. On that basis, [38] submits that tax evasion remains a serious threat to revenue generation by the use of government efforts. It is a criminal offence, and punishable in law, the body or residence of the punishment of an evasion rest on the company that commit the offences or the individuals that hid under to commit the said crime. So, for government to realize its efforts to yield positive tax revenue, government must be ready to path find working tool for assertions. [39] Emphasizes that tax evasion is intentional and unlawful not to fulfilled tax liability. [30] Accordingly, the problem of tax evasion is that the culprit continually declares a loss by mapping up crude expenses to divert profit or drive home fraudulent income. Tax evasion is a deliberate violation of tax law and it is evident in situations where tax liability is fraudulently reduced or false claims are filled on the revenue tax form. It is also seen in the general term and efforts by individuals, firms, trust and other entities to evade taxes by illegal means. [40] This means tax evasion is illegal in law. [41] Posit that tax evasion entails the taxpayers deliberately and imaginarily misrepresenting and concealing the state of affairs in order to reduce tax liability and payment from the tax authorities and it includes in particular dishonest tax reporting; declaring less income, profits or gains then was actually earned or overstating deductions [42] , it is clear that the main problems of tax system in Nigeria and Africa are describe as "Twin Devils" which causes the difference between actual and potential affairs in such a way that individual pays least possible amount of tax without breaking any tax law. [43] Deduce [1] that failure to disclose the correct income that should be assessed either by misstatement of facts, falsification of figures, filing of incorrect returns or by misrepresentation of tax liabilities is tax evasion. This informs that tax payer pays less tax than ought to pay. Therefore, the act is accomplished by deliberate means or act of omission or commission which themselves constitutes criminal act under the tax laws. Wherever the case, the act of omission or commission include failure to pay tax; submit returns; understating income; omission or misstatement of items from returns; claiming illegal reliefs; documenting fictitious transactions; overstating expenses; failure to answer queries to mention but few. [31] noted that tax evasion has become a favorite crime in Nigeria, and despite government efforts, the problem still persists. From the foregoing, tax evasion is a criminal offense that need not penalty with seriousness; it is sabotage, huge fraud and loss to any economy but need coherent approach to deal with. This could be informs of automation capturing and Bank verification (BVN) tracking revenue system. However, manipulating of a lawful obligation is a promotion of arson, which is unethical, lack of moral suasion and misunderstanding of a clear need for tax filing, tax purpose, and sequence. Thus, this can result to fragmentation and collapse of economic fortune, and future existence. Evasion is an outright, dishonest action whereby the taxpayer endeavours to reduce tax liabilities through the use of illegal means according. [44]

Concept of Tax Avoidance
Tax avoidance is a situation where taxpayer exhaustively using all avenues, loopholes in government policies, laws and programmes, policy statements, print media, pronouncements, treaties, exceptions, reliefs and all other medium to sieve taxes income against tax returns and liability through enabling tax law within tax net to evade taxes. Tax avoidance is within the ambit of law and it is not an offense. But becoming a fraud when for instance taxpayer stresses hands into employing other Felix Ogbeiyulu Umanhonlen (2020) expenses (such as qualifying capital nature that is not a part and parcel of the income generating business) outside the nexus income that generate such revenue to deflate taxable liability or income in filing returns for tax purposes. In the case where, a tax defaulter took advantage of amnesty programme to pay preoccupation levy of twenty-five thousand (N 25,000) Naira to cover up for tax liability for all that periods his/her company has refuse to file tax returns is tax avoidance, covering from tax evasion by taking undue advantage of government policies on "amnesty" thereby committing tax fraud. Tax avoidance is a phenomenon, which perhaps is as old as taxation [45] regime itself.Have [42] noted that wherever, and wherever, authorities decided to levy taxes, individuals and firms try to avoid paying them.
Tax avoidance is seen as a way of identifying the loophole in the tax laws and taking advantage of such a loophole to reduce the tax payable. [35] It is a word used to show the various means which have been adopted with the purpose of saving tax and therefore securing the tax payer's earning from greater liability that would have otherwise been incurred. [29] Tax avoidance involves an active means to reduce altogether the payment of tax. [28] Added [29] that tax evasion generates investment distortion in the form of the purchase of exempted from tax or undervalued for tax purpose. [42] Agree that tax evasion is usually done through taking advantage of the loopholes in the tax laws without actually breaking the law. The significance of tax evasion also connotes the legal utilization of the tax regime to one's own advantage so as to reduce the amount of tax that is dueable or payable using means that is acceptable by law, by hiring the services of a professional accountant or tax practitioner to underscore such advantage. Thereby, becomes fraudulent when you culminating into extracting irrelevant and non-liable, taxable expenses to reduce taxable income.
According to [41] , one of the greatest problems facing Nigeria Government tax system is the menace of tax leakages in form of tax evasion and avoidance. Essentially, it is simply going through the tax provisions and taking total advantage for the benefits of the tax payer. In any case, a situation where a tax payer invests in qualifying capital expenditures that may be granting capital allowances. This is considered as an offense and it is a fraud. In such an imaginary measure, [2] Assert that incidence of tax evasion and avoidance by tax payer is high in Nigeria, which is leading to low level of government revenue. Furthermore, anticipated in reduction of government revenue, perhaps reduces the level of government expenditure and spending, thereby, culminating into a reduction in the income savings and expenditure of households and firms which also leading to low level of economic activities and economic growth. Taking cognizance of the consequent non-tax reliability by government, the tax avoidance, takes the form of investment in acts collection, emigration of persons and capital. [3] Despite the tax provision meat to plug loop holes through which taxable individuals minimize tax liability the self-employed taxable individuals engage all kinds of avoidance schemes to minimize or escape tax liability. [3] As a result, arises in a situation where the taxpayer arranges his financial affairs in a way that would make him pay the least possible amount of tax without infringing the legal rules.

Causes of Tax Fraud
In Nigeria, there are many inherent problems of tax fraud. These are found in government insincerity and insensitivity, cruel tax policies, conflicting tax system and socio-political, economic, demographic, religious and sectorial problems. [45] Posit that Nigerians shy from taxes because they see the government of the day as being corrupt and unfair in the utilization of taxpayers' monies and in the provision of basic amenities and other social projects. [47] Agree that this kind of perception can breed tax noncompliance amongst tax payers and thus become a problem which fines and penalties may find difficult to ameliorate. Accordingly, inequitable distribution of amenities, misuse or mismanagement of tax revenue, remoteness of taxpayers from government, absence of spirit of civic responsibility, lack of tax education and enlightenment, corruption in public office, lack of accountability among others [41] , are also identified as major causes of tax fraud.
In essence, most taxable individuals in Nigeria believe that it is none of their business toward the expectation of government to levy them or contribute their penny or hard earned income as tax to the development of a nation. Wherefore will neither compliance nor pay taxes. [48] Highlights that several factors may have cause or responsible for tax fraud or evasion, presume them to be traditional; which are penalty, tax rate, and audit probability; Institutional which are cost of compliance, corruption and confidence or as a result of business characteristics such as size, ownership and industry. Others causes are enumerated to be social and demographic factors, largely determined by the perceived use of tax revenue and the educational level of taxpayers. However, these are major key elements that influence tax fraud and evasive behavior. [43][44][45][46][47][48][49][50][51][52][53][54]  These tax laws to an extent are abysmal, during contraction, government intention would be to adjust or review these taxes to boost economy activities in order avoid recession. Government has no clear cut outline as to what constitute a particular taxable income. The country also have several tiers of government in tax administration, which in its context refers to the way and manner upon which the board of Inland Revenue is able to raise the expected amount of revenue and manage it to the extent that at the end it will be impacted on the economy of the nation. [55] Consequently, different machineries are set in motion by the federal government because of the exclusive legislature authority to ensure compliance and defaulters are liable or penalized. These administrations are to ensure implementation of tax laws, different bodies are charge with same responsibility, obligations, tax collection, ability and abnormal collection, double taxation, scaring and abusive method to determine tax burden. The tax rate of 30 % (percent) on company income tax in response to company tax Act 1990 has been viewed as one of the highest in the world. This rate is one of the value added, 2% (percent) education tax which has to be borne into product, goods or services (import and export) and deductible among others taxes and which taxpayers perceived double taxation, astronomical and too much tax burden.

Felix Ogbeiyulu Umanhonlen (2020)
The unclear nature of the petroleum profit tax rate (PPTR) of 85% (percent) in the form of royalties imposed by section 19 (1) of the PPTA. Basically, the PPT is taxed on royalties and memorandum of understanding (MOU) which guarantees an after tax margin on crude oil levels or operating and capital expenditure, the taxpayer is expected to choose from whichever is considered confortable (lower) among the two kinds of measures (royalties or MOU) without adjustments. Though, the paragraph 6 of the second (2nd) schedule of the Act stipulated 65.75% (percent) concession to indigenous companies producing less than 50,000 barrels pay a rate from 85% (percent) to 30% (percent). Hence, this is conflicting because the MOU that is yet to be passed into law coupled with taxes without adjustment for remittance, and the concessions which the indigenous companies feel has no effect due to government insincerity awarding prospecting licence. This has made it complex for crude-oil companies to bypass normal channels and avoid payment of taxes. [50] submitted that lack of transparency and accountability in the use of public funds contributes to public distrust both with respect to the tax system as well as the government. This thus in turn creates the willingness to evade taxes.Admit [50] that if due to high levels of corruption, citizens cannot be certain whether their paid taxes is justifiable or are used to finance public good and services. Therefore, their willingness to pay suffers and it becomes more likely that they evade their tax liabilities. [56] Said taxpayers might consider evading taxes if the cost of bringing a tax auditor is lower than the potential benefit from tax evasion. Generally, taxpayers expect some kind of services or benefits in response to tax obligation fulfilled. However, ignorance of the law; lack of faith in the ability of the government to use the money well; high tax rate which makes evasion more attractive and economical; absence of viable benefits accruing to the citizens or taxpayers; outright unwillingness to contribute towards the development of the society, and the ridiculous low penalties prescribed in the laws for late payments of tax [35] increases taxpayer resistance. The drafted national tax policy for Nigeria also emphasizes that in Nigeria, there is absence of such a clear understanding of the philosophy behind taxation. Nevertheless, it is necessary that government at all levels, clearly articulate and propagate this philosophy to their citizens. That the policy can only prescribe on the role of taxation in nation building and development. Hence, it is the duty of government to take the step and disseminate the policies to the citizens so as to ensure that Nigerians imbibe tax culture.
Apparently, the framework therefore adds that to carrying out enlightenment on the role and benefits of taxation in Nation development, government should ensure there is proper accountability for and judicious use of tax revenue, so that taxpayers can derive benefits from their contributions to the common purse. Moreso, in that way, citizens would be made aware that they are stakeholder and partners in tax system and that so far as they contribute taxes. They can hold their leaders accountable and be entitled to the provision of social services. Is it true that the citizens can hold their leaders accountable in Nigeria? It seems that the policy contemplated the position of the taxpayers. However, when a taxpayer observed that the rate of transformation from tax to public goods (utility) is very low then the individuals may sense that the government has not kept to her obligation of the agreement. This can negatively affected the tax morale of such taxpayer, and deteriorate ability to voluntarily compliance to tax payments. [57] Admits that most tax payers do not comply with tax provisions because of lack of trust and even sometime inability to meet certain obligations. Therefore, majority of those that complied partially did so thus because of likely penalty that could arise if liability arise after tax audit.
Noted [14] that many developing countries, tax policies are usually weak and characterized by extensive abuse, corruption and coercion. Specifically, governments in Nigeria are perceived as a corrupt and selfish let to whom money should not ever be voluntarily given taxes. Taxes paid are expected to end up in private pockets, not invest in public utilities. Price Water House Coopers (PWC) at a tax stakeholder forum organized by them revealed in a survey conducted to find out why many Nigerians do not pay tax? The result was insightful according to [58] but not surprising that about 70% (percent) said it is because people cannot see taxpayer money at work, 22.5% (percent) it was due to the tax rules that are unclear and compliance process being too complex, while 7.5% (percent) said it is due to poor enforcement by tax authorities. According to [59] Everest-Phillips, citizen expect some kind of service or benefit in return for the taxes paid, where government fails to provide basic public goals (goodsand services) or provides them insignificantly, the citizens may not be willing to pay taxes and tax evasion and avoidance will be the consequence. [24] However, raising tax rate causes tax evader. Taxpayer consider a higher tax rate as an excuse for evading taxes, hence underreport their proceeds and earnings to the tax authorities. [60] Education tax which being deducted before company tax would also cause company to under report profit margins cut edge for tax purpose, this can be perceived as doubt taxation undermine government intention to ensure company do their social justice to the hosts nation. Tax amnesty can improve tax compliance on the ground that strict measures are adopted such as constant tax audits [51] with prosecutions, hence, higher audit probability will result in higher level of tax compliances provided that higher tax penalty rate is attached, which is capable of deterring noncompliance. From the above assertions, Covid 19 pandemic has also exposed the insensitivity and insincerity among most countries leaders, heads of government, legislature and government officials whose tax money made up nucleus spending and wages. Unlike some developed world countries' leaders and private donor, majority of those elected government officials in other clime had contributed their full or half monthly salaries allowances among other things back to assist the people to contend, curtails as well as combating the widespread of the novel viral coronavirus epidemic without disclosing what actually consists of the half or full monthly salaries being contributed to fight the scourge. Such apparent oblivious insight can as well be interpreted, or serve, deters and causes resistance to payment of taxes. The taxpayer is interested in the economic value or benefits of such benevolence in the long-run while wanting to know the monetary amount of their taxpaying money willingly or out of voluntarily acquiescence contributed back on their behalf in the immediate time to unravel the dreaded coronavirus pandemic.

Deterrent Tax Penalties
Tax audit, fines, and penalties are deterrent measures in place by relevant tax authorities to punish tax evader or non-compliance. The deterrence measures to crime have been widely discussed especially the extent of how they could be used to reduce crime in the society [61] . Adds [62] that in counties where the public does not have a significant amount of influence over the system of taxation, that system may be more of reflection on the values of those in power as governments use different kinds of taxes and vary the tax rates. Thus, this the government done to distribute the tax burden among individuals or classes of the population involved in taxable activities. The roles of deterrence measures have been noted to increase the monetary cost of public and private [63] expenditure. admits that amongst tax enforcement tools are such as tax audits, placement of tax penalties, fine, detainment of assets, subsequent disposal of tax default property and compulsory use of tax clearance certificate for major transitions.However, failure to observe compliance [47] according to has its own consequences with various tax laws and provisions which attract fines or penalties of the sum of fifty thousand (N 50, 000) Naira for every month of default plus interest at commercial rate. Hence, tax offenses comprises of both civil and criminal vice. [13] An offence is the violation of any law, regulation and legislation, and any person or persons who is a party to doing any act which amounts to or results in or form part of a serious of facts which together amount to or will result in something which is unlawful is guilty of an offence. The current deterrence measure for non-compliance include a penalties up to twenty-five thousand(N25,000) Naira for employers who fail to register their employers and remits such faxes to relevant tax authorities in respect of personal income tax (PIT), and also face for the payment of all tax areas, employers who failing to keep proper records would face a penalty of five thousand (N5, 000) Naira.
In another development, [42] advise that the level of the tax rate may not be the only the factor influencing peoples' decision about paying taxes. They noted that structure of the overall tax system has an impact. Nevertheless, that, if for instance, the tax rate on corporate profits is relatively low but individuals are facing a high tax rate as burden on their personal income which they may perceive unfair and declare only a part of their income. As a result, large compliance can often and easily take advantage of tax loophole, thus contributing to the perceived unfairness of the system. According to, [64] with passage of time, evidences have shown based on the researches of seasoned scholars; deterrent tax measures such as tax audit, fines penalties alone cannot fully encourage tax compliance. Deterrent measures should not alone be punishment for tax offenses, measures all other civic measure like technology, sincerity in tax spending should be employed to ensuring voluntary compliance, willingness to pay and collections of taxes.

Tax Audit
Tax audit is one of the most effective policies to prevent tax evasion behavour [65] and ways to ensure outright compliance. Accordingly, tax audit is relevant to tax administration both developing and developing countries of the world so as to avoid tax fraud (evasion and avoidance) by tax payers such as organization and individuals. [66] Define tax [4] audit as a process whereby the tax authority examines certain issues concerning to the profits of a company and its other related returns as it may deem necessary and expedient in accordance with the relevant provisions of the Act. However, the primary purpose of tax audit would be to ascertain the extent to which tax payers may have comply with the relevant statutory provisions of the tax Act in respect of their audited financial statements and other tax related returns. It is usually a routine exercise, which its outcome could lead to a reassessment or referral for special investigation especially if tax evasion is suspected. Therefore, helps to sustain the confidence and integrity reposed in the self-assessment scheme currently in force in Nigeria. Tax audit is an dependent examination of book of accounts, tax returns, tax payments and other records of a taxpayer to confirm compliance with statutory tax requirement, rules and regulations and accuracy and correctness of tax paid and adhering to relevant generally accepted accounting principles and standards. [44] Tax audit is established to stimulate tax compliance on tax payers' returns. Suffice to say, to effectively take problems of poor tax administration, government has remarkably employed some tools such as audit, use of tax penalty and partially adopted tax amnesty. Hence, define then as follows; that tax audit involves examination of taxpayers' books of account to ascertain if actual tax returns reflect correct tax payment, while tax penalty is a form of deterrence for not complying with tax obligations. Tax amnesty is a process that allows voluntary declaration of taxable assets and payment of such outstanding tax liabilities without payment of penalties. [63] Tax audit is an examination of whether a tax payer has correctly assessed and reported their tax liability and fulfilled other obligation (OECD). [40] Tax audit is an examination of whether a taxpayer has properly assessed and reported their tax liabilities and meet other requirements. Therefore, it shows that tax audit has to verify or conduct an audit investigation on the level of compliance of any form of tax returns file or audited financial statements or its equivalent tax related platform. Tax audit is require to know whether the position of the tax payers claim is fair and just to the equitable timeliness of his duly, voluntarily obligations. [67] Describe tax audit as an examination of an individual or entity's tax report by the relevant authorities in order to find out compliance with applicable tax laws and regulations of the state. The tax audit exercise essentially is meant to enable the revenue authority to further satisfy itself that audited financial statements and the related tax computations submitted by the taxpayer agree with the underlying records. [57] Describe tax [44] audit as an independent examination of accounts, tax returns, tax payments and other records of a taxpayer to confirm compliance with tax laws, rules and regulations, accuracy and correctness of tax paid and adhering to the relevant generally accepted accounting principles and standards (GAPs). According to, [68] tax audit as an examination of an individual or organization's tax report by the relevance tax authorities in order to ascertain compliance with applicable tax laws and regulations of the state. However, delivery of quality of services to taxpayers will strengthen their willingness to comply with tax rules, and regulation voluntarily as result will contribute to overall level of tax compliance (OECD). [69] Though tax audit is not Felix Ogbeiyulu Umanhonlen (2020) a direct punishment but it is a means to attract sanctions if otherwise after revealing assertions.

Theoretical Underpinning
This study anchored on deterrent theory. The study considered theory of crime relevant to decipher and explain the concept and objective of the paper. It affords to harness penalties as punishment meant for tax offender and the effect of offense against the backdrop of tax fraud. Suffice to say however that the underlying deterrent theory of punishment was propounded and traced back to the early works of classical philosophers, economists and social contract thinkers; notable amongst whom were Thomas Habbes (1588-1678); Cesare Beccaria (1738-1794); and Jeremy Benthan (1748-1832), hence provided the foundation for modern deterrence theory. Their classical utilization theory of crime is that people are rational actors who behave in a manner that would maximize their expected utility. The theory argued that taxpayers "play the audit lottery" which therefore they make calculations of the economic consequences of different compliant [70] alternative.
In [71] the early 70s depict as well expands the works of Becker on economics crime and punishment to incorporate taxation viewpoints. However, Becker in his Syllabus asserts that authorities needed to exerts and appropriately ensues balance between detection of non-compliers and sanctions to the point where non-compliance become irrational. [72] On that regard, [71] examine taxpayer's decision to evade taxes when filling out their tax returns and the relationship between penalty rate for tax evasion at the time the probability of detection and degree of tax evasion involved therein. Thus, the resulting effect shows that there were relationship between these variables with a higher penalty rate and probability of detection deterring individuals or taxpayers from evading their taxes. The essence of the deterrence model of tax compliance is to primarily assess the interaction between probabilities of detection and sanction severity that should affect noncompliance. [73] Based [74] on the observation of the model of economics crime admits that tax compliance as a function of three deterrent variable such as tax rate; tax audit; and probability of detection. Adding that the theory depends essentially on tax audit and penalty which make taxpayers to pay tax as a rule or result of fear of being [75] sanctioned. With the effects of sanctions and sanction threats on criminal or undesirable behaviour, Deterrence theory was now used as a basis to observe many types of criminal behaviour including tax evasion. [51] Therefore, the approach treats non-compliance as a rational discrete individual decision based on probabilities of detection, conviction and levels of punishment. Though, the works of [71] ; and [74] set the foundation for understanding the compliance behaviour on tax response [76] , and which has been criticized. However, many scholars in the 80s began to question the rationale behind the use of the worth of deterrence alone in regulating behaviour, and then focus attention on researching compliance with other means than deterrence. [35] Hence, began to realize the importance of persuasion and cooperation as a regulatory tool for gaining compliance.
Accordingly, [77] noted that non-inclusion of psychological factors that have the "intrinsic motivation" of individual taxpayers compliance without enforcement make their submission for tax assessment invalid. [14] Observed that the existing deterrent tax policies in Nigeria are inadequate and however have not helped to promote tax compliance in the country.Fostering voluntary compliance and enhancing taxpayers' morale enhances tax compliance. Therefore call on tax revenue authorities to adopt approach in that encouraging voluntary compliance and prescribe appropriate sanctions for defaulters. Against this backdrop, if deterrence which is the probability of detection and sanction severity would be the most significant variable in explaining compliance, rational individuals in most societies of the world would be non-compliance because the levels of deterrence are low. [78] Has a positive [79] relationship between taxpayers' responses and probability of audit, thus increases the probability of audit encourage tax compliance since it has direct deterrent influence on taxpayers audited, and indirect deterrent influence on taxpayer not audited. Consequently, the use of threats and legal coercion specifically when perceived or considered as illegitimate and can produce negative behaviour which actions are more often than not resulted in further noncompliance. [53]

Review of Prior Studies
Examine [76] tax rate on compliance in African. The study used primary data (all the African countries as population) and employed multi-stage approach for analysis. The paper revealed that tax rate has a negative effect on tax compliance. Therefore, significant negative correlation exists between tax rate and tax compliance. [34] Evaluate the effect of tax evasion on the economic development of Yobe State, Nigeria. The paper uses secondary data and employed Chi-Square to analyze its findings. The study revealed that the tax evasion has significant effect of the economic development of the state. [41] study to empirically examine the economic implication of tax leakages on the Nigerian economy. The paper uses primary data and employed Kendall's W-test and Chi-Square statistics to reach its analysis. The study reviewed that tax evasion and avoidance have adversely affected economic growth and development in Nigeria. This simplified that lack of good governance is the basis for which tax leakages activities is perpetrated.
Did [42] a work to examine the factors that influences tax evasion and avoidance in Nigeria. The study uses primary data from 120 selected small and medium scale businesses in Lagos and employed Chi-Square to test the data. It found that the low quality of the service in return for tax does significantly influence tax avoidance and evasion in Nigeria. This means that tax system and perception of fairness, low transparent and accountability of public institutions and high level of corruption do significantly influence tax avoidance and evasion in Nigeria.Examine [14] the effects of deterrent tax policies on tax compliance in Nigeria. The paper uses primary data and adopted OLS regression to analyze findings. The study observed that the existing deterrent tax policies in Nigeria are inadequate and have not helped to promote tax compliance in the country.

Felix Ogbeiyulu Umanhonlen (2020)
Hence, fostering voluntary compliance and enhancing taxpayer's morale will encourage tax compliance. [9] Have examined the relationships between probability of detection, tax penalty, tax rate and income tax evasion by applying the deterrence theory among Plalestinian SMEs. The study uses primary data and employed Partial Least Square (PLS) to reach findings. The study suggested a positively significant tax rate in relation to income tax evasion, while probability of detection and tax penalty were significantly negative among Plalestinian SMEs.
In a study carried out by [1] appraise the evasion of personal income tax in Nigeria. The study uses primary data with regression analysis for result. The paper reviewed that the tax payers' relationships with tax authority and weak penalties have a significant influence on tax evasion while tax rate shows a positive relationship with tax evasion. Therefore, the higher the tax rate, the higher the tendency of tax evasion [66] in Nigeria.Did a study that examines the effects of tax audit on tax compliance in Ekiti State, Nigeria. The study uses primary data and employed multinomial Logistic Regression Analysis to determine its findings. The study revealed that tax accuracy and current returns have not been significantly affecting tax compliance. Therefore, tax law has while tax procedure has no effect on tax compliance. This implied that tax audit can influence the tax compliance in Ekiti State of Nigeria. [3] Examine the impact of tax evasion and avoidance on growth of the Nigerian economy. The study uses secondary data from the Central Bank of Nigeria covering from 1999-2012 and adopts OLS pool regression to evaluate result. It was found that tax evasion and avoidance had negative significant impact on growth in Nigeria economy.

Research Gaps identified from Prior Studies Reviewed
This study observed some research gaps from the reviewed studies done above. Prior study that examined the deterrence factors on tax fraud pinpointed some elements which include probability of detection, tax penalty, tax rate, discouraging tax evasion, intensity of tax evasion;  probability of being audited, perception of government spending, penalty, enforcement, tax rate, social norms, taxpayer attitude toward government, legal system, traditional institutions, fines  low services quality in tax returns, tax system perceived unfairness, low transparency and accountability in public institutions, high level of corruption [79][80][81][82][83] lack of good governance, imposition of penalties, tax amnesty policy, perception of government attitude to tax system, reduce tax leakages activities, improve  governance. Tax accuracy, tax laws, tax procedures, tax influence, threats of punishment; [58] citizen perception of government accountability, maintenance of tax morale, improving the quality of public governance, shape affirmative emergence instruments, highly tax aggressiveness, moderately tax aggressive, tax aggressive at equilibrium, not tax aggressive. [45][46][47][48][49][50][51][52][53][54] Consequently, these studies provided mixed reaction in their findings. Some prior studies on deterrent tax fraud examined inadequate tax deterrent, unhealthy tax policies, enhancing tax morale, tax administrative effectiveness, promote tax compliance, maximum tax collections, enhancing corporate tax audit, reduce tax rate  Psychological aspect, fundamental impact, strict deterrent, deterrent measures, persuasive measures, tax education, marginal increase in tax audit, and penalty lead to increase in tax compliance.  But this work focused on deterrent tax fraud evaluating causal factor and concepts using prior studies to look into it subject matter. Though, some prior studies reviewed have limitations respite in the area of relevance of this topic. This study concentrated on matter partisans to fundamental issues in tax frauds. As such found its place in adding to knowledge coverage. The study alsotherefore attempts regard to the above existing empirical literature and knowledge gaps envisaged: • Reviews literature to juxtapose the role of deterrent punishment for tax fraud by using theoretical survey approach to domesticate relevant issues on Nigeria domestic climate and background; • Although, the study is not limited only to deterrent tax fraud, it bring to the fore discussion on the causes of tax fraud, tax evasion and avoidance, tax audit, tax penalties and contrasts it with government philosophy and insensitivity toward the plights of the taxpayer. However, blends its claims by smoothing out relevance arguments; • Explores the need for tax revenue, and dismiss government obscure opaque lukewarm attitude toward tax revenue application, and obsolescent nature of deterrent to lessen as oppose to tax fraud considering huge linkages and abysmal losses to tax revenue through coercion in the recent past; and • Expands reviewed works done in this area with thorough, rigorous and profound view as to achieving the willingness to pay and generate tax revenue as well as bridge literature gap among current period.

Analysis of Discussions, Conclusion and Suggested Recommendations
The main aim of the study was to conceptually review causal factor on deterrent tax fraud in Nigeria. The paper asserts that tax is amajor source of revenue to government, acomponent that forms the nexusand/orbedrock of government income. Therefore, corporate entities and individualsshould pay tax.The articlerevealedthat tax fraud may not have an end in Nigeria if those saddled with the responsibility of fostering delivering tax welfare to taxpayers are seennot to be accountable, transparent, and devoid of skirmishes as translating tax revenue into incentive and responsibility. It noted that the tax structure as currently constituted in Nigeria encourages tax fraud. Thus,has way of doping economic progress, growth and development which if appropriate steps are not in place. Deterrent has also been proven from extant literature not to have been effective in realizing full tax compliance. In order to completely curb the menace to a bearable minimal level in Nigeria, those entrusted with taxpayer's money must be seen answerable, adding value, and be able to translate tax revenue into what is socially agreeable and tolerable among players. The study therefore dismissedthe application of punishment as method of realizing payment of taxesand reducing tax fraud. Hence,deterrent is not anylonger the way to go. Deterrence negates the willingness to pay taxes when the taxpayer perceives denial and despondency of need fulfillment.
The proponentof this paper believethat incessant fines,penalties orpunishmentwould create additional tax burden which the recipient of such levy has no objection aboutbutwould have counted, renderor consider asincidence of tax loss through evasion and avoidance and would want Felix Ogbeiyulu  to evolve thereby empowering tax collector with kickbacks and cohesion. People will obey rules when government does the right thingor needful.Like the typical Electricity Distributing Company (EDC), OftentimesEDC will not supply electricity light, but occasionally these folks go about distributing unwholesome estimated bills or simply put, expecting you to make monthly payment,a reflection of amount showing you are servicing your metering whether there is credit balance on it or not. Hence, you get disconnected afterword because there may be supply of electricity in the interim.The studyhowever debugs that people arecarefully behaved, more responsivein accepting responsibility when you challenge themrather than the use of obscure methodsor threatswherefore frighteningthem to the chattingcourse of safety.
It then argued that the willingness to pay taxesshoulddepend on moral suasion, equity, clear-justice (fairness),performanceand civic uprightnessof the government. Raising arbitrary taxes with theuse of remoteness, uneducatedand nonscientific means like hoodlums, hooliganism and thugs, creating upheavals and uncertainty insteaddeployment ofsimple mechanism or template that recouped revenue,anacceptable methodby way ofautomation being tax is a compulsory levy imposes by government matched with thewillingness to payensuringperato optimal benefits.In that respect, allowing forces of supply and demand as well asmarket interplay represents the structure by which tax is collected and remitted, capturing more people into the tax nets without any rancor or drawbacksynergizing with a means of identification like the use of bank verification number (BVN).The paperapplied theoretical method using a causal factor and conceptual approach involving survey of literature to bring relevance issues to the fore as oppose to the aforementioned nomenclatures. It therefore proposes that exigencies of time takes its course, and allows civility, novelty, automation inclusiveness and idealism congregations as well as remediate tax fraud in Nigeria. Suffice to say morale stimulates voluntarily discharge of taxpayer tax obligations, and enjoins government at all level to promote transparency and accountability to whose income made up spending. However, the justification to pay taxes must be seen and emphasized on the basis of the ability to return taxes on welfare benefits.

Contributions to Knowledge
This study lends credence to studies carried out in this area of interest as a result contributing immensely to literature and knowledge thereby reaching position on the role of deterrent as age long tool for tax offender in Nigeria. Hence, the paper contributes to knowledge as following: The study • domesticated theoretical research survey approach to expand literature whereby largely made our study significant input to dialogue on the Nigeria geographical domestic background and climate; • appraises relevance model on profound studies reviewed to bring to the fore sound argument based on analytical survey conviction thereby expands periods of works earlier done in this area to the current period; • justify tax revenue claims and cushion the effect of deterrent as punishment for tax fraud and jettison government lukewarm attitude toward tax payers; and • �upports the scope of tax revenue, as well narrowing down the roles of deterrent as aim to achieved payment of tax levy instead improving on willingness to pay with incentive from prior knowledge on relevant literature ensuring prudency, accountability and transparency in discharge of tax responsibilities.

Suggestions for Further Studies
As this study does not claim to be exhaustive and give the fact that research has always been described as a continuum. However, this work recommends the following for further studies.
• The use of multiple pooled ordinary least square (OLS) regression and econometric package on likert five scale point to evaluate deterrent measures of tax fraud on tax compliance. • Also the use of Analysis of Variance (ANOVA) with the combination of Chi Square to assess government tax revenue vis-à-vis policy on punishing tax offenders and justification of tax revenue in Nigeria.