Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between presumptive tax assessment and internally generated revenue has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of Selected States in South-West Nigeria where operating conditions differ markedly from more developed markets.

Within the context of Selected States in South-West Nigeria, this relationship carries particular significance. Organizations in this setting operate under a distinct combination of economic, regulatory, and market conditions that may amplify or dampen the effect of presumptive tax assessment on internally generated revenue, making a context-specific inquiry both timely and necessary.

1.2 Statement of the Problem

Despite a growing body of literature on presumptive tax assessment, there remains limited consensus on the precise nature of its relationship with internally generated revenue, particularly within Selected States in South-West Nigeria. Many organizations continue to make decisions about presumptive tax assessment without a clear, evidence-based understanding of how those decisions ultimately affect internally generated revenue. This gap between practice and empirical understanding is the central problem this study seeks to address.

1.3 Objectives of the Study

1. To examine the effect of Presumptive Tax Assessment on internally generated revenue in Selected States in South-West Nigeria.
2. To assess the extent to which presumptive tax assessment influences internally generated revenue within the study area.
3. To identify the challenges associated with presumptive tax assessment in relation to internally generated revenue.
4. To recommend strategies for optimizing presumptive tax assessment in order to improve internally generated revenue.

1.4 Research Questions

1. What is the effect of presumptive tax assessment on internally generated revenue in Selected States in South-West Nigeria?
2. To what extent does presumptive tax assessment influence internally generated revenue within the study area?
3. What challenges are associated with presumptive tax assessment in relation to internally generated revenue?
4. What strategies can be adopted to optimize presumptive tax assessment in order to improve internally generated revenue?

1.5 Significance of the Study

This study is significant to a range of stakeholders. For policymakers and regulators, the findings offer evidence to guide the design of frameworks that support healthier outcomes around internally generated revenue. For managers and practitioners within Selected States in South-West Nigeria, the study provides practical insight into how presumptive tax assessment can be better managed. Finally, it contributes to the academic literature on taxation by extending existing knowledge into a specific empirical context, and offers a reference point for future researchers.

1.6 Scope of the Study

In terms of scope, this study confines itself to Selected States in South-West Nigeria, focusing specifically on how presumptive tax assessment relates to internally generated revenue within that setting. Findings are interpreted within these boundaries rather than as universal claims applicable to every organization or market.