ABSTRACT

 This study focuses on the problems and prospects of personal income tax as a source of revenue to the Abia state government The problems associated with the administration of persona! income taxare lack oftrainedand qualified staff, corrupt alliance oftax administrators with tax payers and no enlightenment on the part of taxpayers as regards the importance of taxation. The objectives of this study are to ascertain whether there are really problems in personal income taxgeneration and collection; investigate and identify these problems, find out how theseproblems have affected work ofthe Board ofInternal Revenue, discuss the problems and prospects ofpersona! income tax generation in Abia state and recommend measures to overcome orminimize these problems ofpersonal income tax generation and collection in Abia state. In order to achieve these objectives, primary data was used and the questionnaire was analyzed using the chi-square statistical technique. The result showed that one null hypothesis was rejected and two were accepted. The findings ofthe results showed thatpersonal income tax serves as a strong source of revenue to the Abia state government, that the misappropriation offunds by tax officials aggravates the problems and challenges ofpersona! income taxgeneration and that the operation ofan efficient tax system alone would not cause a significant reduction in the problems and prospects ofpersona! income tax generation and collection. Also, conclusion reached was thatpersonal income tax is the mostproblematic and disappointing of all taxes in Abia state, yet it yields a targe chunk of total revenue of the country. For an effective and efficient tax system, tax reforms should be adopted and followed up. On the part of the government, the system should be closely monitored and maintained; and trained and qualified Staff should be employed. However, the tax system requires patriotism on the partofthegovernment, tax officials and taxpayers in orderto survive.