1.1 BACKGROUND OF STUDY
Tax which is a major source of public revenue has been defined as compulsory levy imposed on individual and firms by the government. Payment of tax unlike payment of price for acquisition of something of material value, implies the settlement of the tax payers civic liability to the government. Tax is one the most economic measure used by the governments in both developing and developed countries to encourage or discourage a particular type of activity. The revenue accruing from income tax is the government for its projects and expenditures tailored to its development plan and budget implementation. Personal income tax is directly imposed on income of individuals. It is usually progressive. Furthermore, taxes act as an instrument of social change and reform when used as creative force in economic planning and development, can change the economic system. Taxes are also used to reduce the inequality in income distribution. The personal income tax in Nigeria is regulated by income tax management. But the administration is vested in Joint Tax Board. The Board exercises power and duties confirmed on in by Income Tax Management Act (ITMA) and other powers agreed upon by the government of each state. The functions of the Board are well explained in s.27 of the Income Tax Management Act 1961.