Taxation in a Globalized Economy-Tax a Poorly-Tapped Treasure Base of the Nation

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1.INTRODUCTION
In any organized society, the power to maintain law and order as well as development is usually vested in government which comprises group of recognized individuals as legitimate leaders. To carry out its responsibilities, governments source funds through various means which include imposition of tax and other levies on the subjects. This is because the human society comprises those who have enough resources and those who do not have much that made up the society for which government must provide essential amenities. The tax paid by those with resources to government will enable governing authorities to provide social services such as security, health, education recreation facilities, good transportation system, etc to the populace (Soyode and Kajola 2006). Therefore, tax is a very crucial and common source of income to all forms of government at various levels. In fact, tax is the most sustainable and dependable source of revenue to authorities. In the meantime, the definition of tax has put scholars on a contentious lane as no single definition has been accepted as the most suitable or general throughout the world. Nonetheless, all definitions seem to have some common features. Oguntoyinbo (2002) refers tax as compulsory payment by citizens or entities to the government of a state or territory or nation. Similarly, Soyode and Kajola (2006) define tax as an amount of money paid to the government, usually a percentage (%) of personal income or company profits. On the other hand, Adewunmi (1992) defines tax as a compulsory levy (in money, goods or services) imposed by public authorities for which nothing is received directly in return. With all of these definitions, tax has the following characteristics: -It is a compulsory levy imposed by an authority on an individual entity or items. -It is administered by a legitimate body (relevant tax authority) -It is not arbitrary as the basis of charge (percentage) is known. -It is paid on income, profit and or disposal of items (tax base) -It is a periodic payment.

In a nutshell, taxation is therefore the practice, management and administration of tax for effective and convenience application. As revealed by Soyode and Kajola (2006) taxation has the following objectives: (a)Revenue Generation: Tax is used by government in generation of revenue to finance its ever increasing expenditure needs. (b)Provision of merit Goods: An important objective of tax system is the promotion of social, economic and good governance through provision of merit goods such as health and education. (c)Provision of “Public Goods”: Provision of commonly consumed goods and services such as internal security, external security and provision of street lights and good roads for which an individual cannot be levied the cost of the goods or services consumed is one of the functions of government achieved through tax collection. (d)Discouraging consumption of “Demerit Goods”: Tax may be used to discourage consumption of demerit or harmful goods such as alcohol and cigarettes. This is done to reduce external risks or costs to the society. (e)Redistribution of income and wealth: Tax system is a means of ensuring the re-distribution of income and wealth in order to reduce poverty and promote social welfare. Adewunmi (1992) concludes that taxation is a much more useful tool in the hands of government when try to provide for the economic and social needs of the citizens but with so little of their own resources, they have had to rely on taxes to provide the needed funds. One way in which the government uses to reduce the acuteness of the difference between the rich and poor is to tax the rich and use the moneys collected to provide for and develop the poor. Similarly, Micheal (2012) observes that the single most important tax relevant difference across most countries is in natural resource wealth. This is far from entirely exogenous of course, in that the level of exploration for resources...
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