Sleuthing of Tax Fraud in Small and Medium Enterprises (SMEs) in Nigerian using an Intelligent System: Investigative Study

Tax fraud has eaten deep into Nigerian’s economy especially in Small and Medium Scale Enterprises (SMEs) been a subset of the industrial sector. The estimates regarding tax fraud at the international level reveals that Nigeria is one of the developing countries with a high level of tax fraud. The negative effect of this on the nation is quite evident as Nigeria as a nation had in the past depended majorly on oil giving less concern on tax as a source of revenue generation but lately, the oil sector is not booming as previous, which calls for urgent reinstatement of the tax sector which is one of her enormous sources of revenue generation. This research focuses on the detection of fraudulent activities in Small and Medium Enterprises (SMEs) in Nigeria using an intelligent data mining system. The intelligent system directly accesses the database of the SMEs tax payers and flows whistle whenever a fraudulent activity is suspected. This intelligent is built using Artificial Neural Network (ANN) for the reasoning and Supervised Learning Technique (SLT) for the learning. The investigative stage shows that it is highly exacerbating for those persons faithfully paying their taxes because it is deducted from source(like salary earners), enjoy same amenities provided by the government through the generated tax revenue and most projects are abandoned and borrowing becoming the order of the day in Nigerian government because of lack of fund which can also be alternatively generated when the tax sector is properly handled by implementing the proposed intelligent system.