The serious decline in the price of oil in recent years has lead to a decrease in the funds available for distribution to the federal and state Governments. The need for the state and local government to generate adequate revenue from internal sources has therefore become a matter of extreme urgency and importance. This need underscores the eagerness on the part of state and local government and even the federal government to look for new sources of revenue or to become aggressive and innovative in the mode of collecting revenue from existing sources. Agudu (2004) states that though taxation may not be the most important source of revenue to the government in terms of the magnitude of revenue derivations from taxation, however, taxation is the most important source of revenue to the government, from the point of views of certainly and consistency of taxation. Aguolu (2004) further mentioned that taxation is the most important source of revenue to the government. Owing to the inherent power of the government to impose the taxes, the government, is assured at all times of its tax revenue no matter the circumstances.
The study focuses on identifying the means of taxation has been utilized to promote fiscal redistribution of income, identify problems that militate against the use of taxation as revenue generation in federal capital territory (FCT).
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Over the years, revenue derived from taxes has been very low and no physical development actually took place, hence the impact on the poor is not being felt. Inadequate tax personnel, fraudulent activities of tax collectors and lack of understanding of the importance to pay tax by tax payers are some of the problems of this study. The issues mentioned above will therefore constitute the problems to be addressed by this research work.
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To achieve the above stated objectives the study came up with the following research questions;
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Hypothesis one (I)
H0: There is no significant impact of tax payment in the profitability of companies
H1: There is significance impact of tax payment in the profitability of companies
Hypothesis Two (II)
H0: there is no significant impact of tax collected by government in the survival of companies
H1: There is significant impact of tax collected by government in the survival of companies
Hypothesis Three (III)
H0: there is no significant impact of tax payment in the performance of companies in respect to social responsibilities.
H1: There is significant impact of tax payment in the performance of companies in respect to social responsibilities.
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The result from this study will show effect of tax collection on the profitability of companies in Nigeria. Information resulting from this research will form a basis of formation of government policies that govern taxation. The study findings will also be a great importance to stakeholders, including the management of corporate Financial Organizations who run the companies on a daily basis since it will provide an insight into the impact of tax collection on the profitability of companies in Nigeria.
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Tax revenue generated by the federal government of Nigeria and tax revenue generated by some selected state were obtained in order to access the impact of taxation on revenue generation by the federal government of Nigeria and by some selected states in Nigeria from 2002-2011. It is worthy to note that in this study one state was selected from each of the six (6) geopolitical zones in the country, North, central zone, South Southern zones, south western zone, North western zones, South Eastern zones and federal capital Territory. Federal capital territory was chosen to replace one (1) State from the north eastern zone because the required Data which was to be obtained from Taraba state could not be obtained due to the uncooperative attitude of the chairman, board of internal revenue, Jalingo Taraba state. The questionnaire was administered to the employees of Federal Inland Revenue Service (FIRS) Abuja FCT, State Board of Intern al Revenue, Kogi State, State Board of Internal Revenue, Delta State, State Board of Internal Revenue, Ebonyi State, State   Board of Internal Revenue Abuja FCT, State, State Board of Internal Revenue, Niger State and sample of tax payers from the selected six geo-political zones in the country. The total population for this study comprises ten thousand, one hundred and twenty six (10,126) employees as analyzed below
        DISTRIBUTION OF THE POPULATION
 S/N0
POPULATION OF THE STUDY
TOTAL NUMBER OF STAFF
   1
Federal inland Revenue Service, Abuja FCT
60
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TOTAL
                        60
Source: Field Survey, 2012.
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Taxation is a means by which government finance their expenditures by improving charges on the citizens and corporate entity .government use taxation to encourage or discourage certain economic decisions for example reduction in taxable personnel (or households) income by the amount paid as interest, on home mortgage loans result in greater construction activities, and generate more Jobs.
A tax (from the Latin Taxo) is a mandatory financial charge or some other type of levy imposed upon a tax payer (an individual or other legal entity) by a governmental organizations in order to fund various public expenditures. A failure to pay, along with evasion of or resistance to taxation, is punishable by law.
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Revenue generation is a complete amount of money generated during a specific period of time. The money is used to calculate the business profit and it is also the process by which a company market and sell a product or services to produce income.
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Tax administration means the management, conduct, direction and supervision of then execution and applications of internal revenue laws or related statutes of a state. A tax system is a legal system of accessing, collecting, interpreting, enforcing and collecting taxes.
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A Gross domestic product (GDP) is a monetary measure of the market value of all final goods and services produced in a period (quarterly or yearly) of time. Normal GDP estimates are commonly used to determine the economic performance of a whole country or region, and make international comparisons. Normal GDP per capita does not, however, reflect differences in the cost of living and the inflation rates of the countries. Therefore using a basis of GDP Re-capital at purchasing power parity (PPP) is arguably more useful when comparing differences in living standards between different nations…..
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6) TAX EVASION
This is the illegal non-payment or underpayment of taxes by individuals, corporations, and trusts. Tax evasion often entails tax payers deliberately misrepresenting the true state of their affairs to the tax authorities to reduce their tax liability and includes dishonest tax reporting, such as declaring less income, profit or gains than the amounts actually earned, overstating deductions. It is a criminal act.
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This is the legal usage of the tax regime in a single territory to one’s own advantage to reduce the amount of tax that is payable by means that are within the law. Tax sheltering is very similar, although unlike tax avoidance, tax sheltering is not necessarily  legal.