This project develops the Main reasons for the emergence of such a market are tax avoidance through debt shifting and the existence of institutional weaknesses and financial frictions across host countries. The serves to derive hypotheses regarding the role of local versus foreign characteristics such as profit tax rates, lack of institutional quality, financial underdevelopment, and productivity for internal debt at the level of a given foreign affiliate. The paper assesses hypotheses in a panel data-set covering the universe of Agip oil company multinational firms and their internal borrowing. Numerous novel insights are gained. For instance, the tax-sensitivity found in this paper is many times higher than previous research suggests. This accrues mainly to three things: the consideration of the boundedness of the internal debt ratio as a dependent variable in comparison to its treatment as an unbounded variable in most of the previous work; the coverage of all (small and large) multinationals here rather than a focus on large units in previous work; and the inclusion of endogenous characteristics in other countries multinationals are invested in (due to endogenous weights) while previous work did not consider such effects at all or assumed them to be exogenous. Moreover, local and foreign (at other locations of a given affiliate) market conditionsmatter more or less symmetrically and in the opposite direction.
Tax and internal borrowing is a financial issue and its payment is a civil duty. It is the imposition of a financial burden for the government on individual firm and companies and a process of borrowing in which a word is copied from a non-standard variety into the standard language (cf. Görlach 2001: 158). For lack of prestige, dialect words are often not considered dictionary-worthy, but eventually some items may become fully integrated in the standard variety, typically without the speakers being aware of their origin respectively.
In general based, the word tax means any contribution imposed by the government upon individual and companies for the use of government to provide facilities or services as rendered by the state. It is not a voluntary payment or donation but an enforced contribution made on the pronouncement or directive of legislative authorities.
Osita (2004:1) stated, taxation may be define as the compulsory leave by the government through it’s various agencies in the income, capital or consumption of it’s subject such as salaries, business profits, interest, dividends, commission regularities, rent etc.
It could be said that there are three main methods of financial economic expedition open to meet developing countries there are:-
(a)   LOANS
(b)   GRANT
Of these sources, tax is perhaps the most important since the level of government expenditure is to a great extent dependent on the ability of the tax system to generate the required revenue at the disposal of the government.
In spite of this benefit from tax most people still indulge in corporate tax and internal borrowing. Attempt to avoid some portion of liability or not to pay tax will affect the revenue of the government that is the reason why the government frown at the issue of corporate tax and internal borrowing, and uses it’s authorities to enforce compliance.
ARONOMOLE and OLUWALAYODE (2006:39). Define tax avoidance as legal ways by which a tax payer reduces in tax liabilities.
Tax evasion is a deliberate on the part of the tax payers to reduce their tax liabilities through illegal means or an attempt not to pay tax due.
The distinction between this tax avoidance and tax evasion is that tax avoidance is not considered a criminal offence where as tax evasion is a criminal offence.
According to ANYAELE (1990:225) a tax may be defined as a compulsory contribution imposed by a government authority on goods, individual and co-operate bodies irrespective of the exact amount of services rendered to the tax payer in return and not imposed as a penalty for our legal offence. Both direct and indirect taxes that are collected for the government inform of income tax, exercise duty, import and export duties. Purchase and sales taxes and so on help the government to generate a lot of revenue for the smooth administration in the nation.
There are two elements in every form of taxation and that is the BASE AND RATE. The tax base is the object which is taxed or a measure of the private sector income or wealth that can be taxed, while the tax rate is the percentage of the measured amount taken off from the tax base. In this case the money realized from it is used to provide social goods and services, so that everybody both the rich and poor will have equal chances of making use of them, that is the goods and services. They include pipe borne water, electricity, good roads, hospital, schools etc. most people in Agip oil company has the habit of evading or avoiding tax payment i.e. they always avoiding paying their taxes. With this state of affairs the various tier of government in the Agip oil company don’t usually generate enough revenue which will enable them to effectively execute all the development projects which are highlighted in their budgets.
It has to be pointed out that the successive Agip oil company governments have not made adequate and sincere efforts toward informing the tax dodger or evader on the need for them to pay the taxes. All attentions have been directed on the revenue from oil sector while taxes and agriculture, which supposed to be generating a lot of revenue to the Agip oil company, are deliberately over looked.
Also the researcher wants to look into the problems of paying tax by the public, such problem are as follows

  1. a) corporate tax and internal borrowing by the public
  2. b) Poor system of tax collection
  3. c) Inability of the government to prosecute tax avoidance. 1.2 1.2 STATEMENT OF THE PROBLEM

It has been noted that tax system in Agipoil company has come to play a significant role, as a major source of revenue to the federal government by way of imposing tax on tax payers and it is for them to pay up the tax.
The act of evading and avoiding tax by most registered companies and some individuals has however affected the revenue base of the government especially in providing essential services in the society. People naturally prefer to reduce their tax liabilities by deliberately overstating their expenses and make false entries and fictions in their books of account. Thus, their act however, causes tremendous reduction in the revenue accruable to the government which eventually shrinks revenue to the treasure of government.
The inability of the revenue board to collect substantial amount of money from tax is as a result of evasion and avoidance of tax. This research work examines the problems facing the revenue department in collecting taxes and levies under their jurisdiction with a view to indentifying possibilities at minimizing or even eradicating corporate tax and internal borrowing.
The objectives of this study are as follow

  1. To analyze the various causes of corporate tax and internal borrowing
  2. To identify the factors or problems militating against the tax assessment and collection in Agip oil company.
  3. To identify possible effects of the corporate tax and internal borrowing on the economic development of the Agip oil company and Agip Oil Company Port-harcult in particular.
  4. To analyze the effectiveness and flaws of various tax in the Agip oil company
  5. To examine ways in which corporate tax and internal borrowing can be reduce with the new reforms.
  6. To examine tax reforms in Agip oil company

For this research work to be effective it please the researcher to ask the following question

  1. What are the causes of corporate tax and internal borrowing
  2. What are the factors or problems militating against the tax assessment and collection in Agipoil company?
  3. What are the possible effects of corporate tax and internal borrowing economics development of the Agip oil company
  4. Are tax laws in the Agip oil companyeffective
  5. Have new tax reforms reduce corporate taxand internal borrowing and tax avoidance in AgipOil Company
  6. Do the loopholes in the tax laws encourage corporate taxand internal borrowing in AgipOil Company?

To aid the research work the following hypotheses has been postulated, the mill hypothesis is denoted by “Ho” while the alternative hypotheses is denoted by “HI”
H0: There is a relationship between tax/internal borrowing and multinational firm
H1: there is a relationship between tax/internal borrowing and multinational firm
The research would also help the professional bodies like the chartered institute of taxation of AgipOil Company and the institute of chartered accountants of Agipoil company as well as their members to see the areas of deficiency in the collections and call for improvement in tax revenue.
This research would also be relevant to the future researchers and the dents of accounting, economic, business administration and other social and management sciences as well as the legislations which will also benefit immensely from this research because it will form basis of tax policy formation, implementation and administration.
Since no single research can validly cover all areas of the topic the researcher tends that thrust of this project will be limited within the scope of how tax payers performance on tax are influenced by the choice of its tax system. The study will focus primarily on Agip Oil Company Port-harcult to be precise to enable the researcher carryout on extensive investigation on this subject. The state to be studied is: Agip Oil Company Port-harcult.
It is not unusual for research to encounter some difficulties in course at their research and these may include.

  1. FINANCE: This is always a major limitation in a study of this nature, since the individual may not have enough money to carryout all the necessary research.
  2. LACK OF DATA: There are areas where data is available but which the researcher cannot lay hands on because the relevant information is sometimes termed confidential and unavailable to outsiders.
  3. LACK OF CO-OPERATION:- By some of the respondents whom he administered certain copies of his questionnaire and vocal interview.
  4. Delay in giving back its him some of the copies of the questionnaires for some of the respondents.


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