EVALUATION OF PERSONAL INCOME TAX ADMINISTRATION AND THE SOCIO-ECONOMIC DEVELOPMENT OF IKEJA LOCAL GOVERNMENT AREA OF LAGOS STATE.

EVALUATION OF PERSONAL INCOME TAX ADMINISTRATION AND THE SOCIO-ECONOMIC DEVELOPMENT OF IKEJA LOCAL GOVERNMENT AREA OF LAGOS STATE.

ABSTRACT

This research work is an investigation into the' administration of personal income tax and the socio-economic development of Ikeja Local Government of Lagos State. To tax is to impose a financial charge or other levy upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law. This study adopts both the historical and survey research methods in generating relevant data. The population of the study is limited to selected tax payers in Ikeja Local Government Area of Lagos State. The sample size of the study is 50, while the sampling technique Used is random. The chi-square (X2) method was adopted as a method of analyzing the data generated in the course of the study. The study concludes that the way forward from is for the Lagos State government to implement its tax policy effectively as to educate and encourage tax payers in Ikeja metropolis in paying taxes regularly. Recommendations made in the course of the study among others is that the Lagos State Government should consider Ikeja taxpayers and other key stakeholders' interests in fiscal policy formulation and implementation in order to achieve improved tax awareness and compliance rate in the local government area.

TABLE OF CONTENT

CHAPTER ONE

Introduction

1.1 Background of the study

1.2 Statement of the problem

1.3 Objectives of the study

1.4 Research questions.

1.5 Research hypotheses

1.6 Significance of the study

1.7 Scope and limitation of the study.

1.8 Plan of the study

1.9 Operational definition of terms

1.10 Historical background of Ikeja Local Government Area References

CHAPTER TWO

Literature review

2.1     Introduction  

2.2.    Theoretical framework

2.3     Purpose and effects of tax

2.4     Personal income tax act 1993 (no 104) operation of pay as you earn (payer) regulations 2003

2.5     The administration of personal income tax in Nigeria

2.6     The problem of tax collection

2.7     Conclusion

          References

CHAPRTER THREE

Research methodology

3.0     Introduction

3.1     Research design

3.3     Sample size

3.4     Sampling technique

3.5     Sources of data

3.6     Method of data analysis

3.7     Research instrument

3.8     Reliability and validity of research instrument

References

CHAPTER FOUR

Data presentation and analysis

4.1     Introduction

4.2     Data presentation

4.3     Test of hypothesis

CARPTER FIVE

Summary of findings, conclusion and recommendations

5.1     Summary of finding

5.2     Conclusion

5.3     Recommendation

          Bibliography

          Questionnaire

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY: EVALUATION OF PERSONAL INCOME TAX ADMINISTRATION AND THE SOCIO-ECONOMIC DEVELOPMENT OF IKEJA LOCAL GOVERNMENT AREA OF LAGOS STATE.

Every Society in whatever form will comprise the ruling and the authority and the ruled subjects. As social contract term the ruler is expected to perform some roles; be it administrative, social, economic, political, cultural or religious. In return, the ruled subjects that enjoy the benefits from these roles performed are to give something for keeping the machinery working. This could be in cash or in kind. 'In light of the above, every constituted human society, whether primitive or modem, has one form of levy or the other. This necessitates tax and taxation. A historical review of man and society reveals that tax exists as a major source of revenue for government.

Tax payment, according to Nightingale (1998), "is the part of the price to be paid for living in an organized and orderly society, for if this is not done, the miscreants produced through the inequality in the system will be a source of constant irritation to the well-being of those who have." A system of tax- will vary (even if slightly) from one 'country to the other because it is a socio­political and economic' model representing society's social, political and economic needs and aspiration at arty given time. Because of this, Nigerian tax system is dynamic and is continually changing to meet the needs of the constituents of the society.

An income tax is a tax levied on the income of individuals or business (corporations or other legal entities). Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive, when the tax is levied on the income of companies, it is often called a corporate tax, income tax, or profit tax. Individual income taxes often tax the total income of the individual (with some deductions permitted), while corporate income taxes often tax net income (the difference between gross receipts, expenses, and additional write-offs). Various systems 'define income differently, and often allow notional reductions of income (such as a reduction based on number of children supported).

According to Lekan and Sunday (2006) "Personal Income Tax is a tax imposed with income as its base." This income is as received by some chargeable people. Agbetunde (2004) states that "It is not everybody that falls under the coverage of this tax but certain sets of people called taxable persons." The discussion on the administration of income tax is incomplete without due consideration of the socio-economic development of Ikeja Local Government Area of Lagos State.

In light of the above, the revenue generated through taxation in Ikeja Local Government of the state has been channeled to various areas such as road construction and rehabilitation, transportation, traffic management, environmental beautification, waste management, flood control, physical planning and flood upgrading, education, job creation, health, economic planning, commerce and industry, housing, etc. most feasible in Mobolaji Bank Anthony Way, Obafemi Awolowo Road, Oba Akran Road, Airport –Road etc,

The economic impact of personal income tax administration in Ikeja cannot be over-emphasized. It is seen in the system of transportation in that, roads have enormous impact on the standard of living of the people in so many ways. It is also noticeable in the environment to general, because of the determination to have a sustainable environment and this has prompted an aggressive promotion of a culture of 'Greening Ikeja Local Government. '

The success 9f this landscaping and beautification exercise is self-evident in many outer and inner areas and major roads as stated earlier.

In the course of this study, effort shall be made to discuss extensively on the economic importance of personal income tax administration in Lagos State, and Ikeja Local Government in particular.

1.2   STATEMENT OF THE PROBLEM

The following are the problems that prompted the pursuit of this study:

 Low level of awareness of the method of operating personal income tax system by tax payers in Ikeja Local Government of Lagos State.  High level of tax avoidance and tax evasion among traders in Ikeja Local Government.  Slow rate of socio-economic development In Ikeja Local Government.  Inadequate qualified and competent tax inspectors, tax collectors and tax consultants in Lagos State.

e.     Indiscriminate imposition, assessment and collection of taxes by officials of tax authorities in Lagos State.

1.3   OBJECTIVES OF THE STUDY: EVALUATION OF PERSONAL INCOME TAX ADMINISTRATION AND THE SOCIO-ECONOMIC DEVELOPMENT OF IKEJA LOCAL GOVERNMENT AREA OF LAGOS STATE.

Relevant to the study is the definition of the general objectives of this study, which is the evaluation of personal income tax administration and the socio- economic development of Ikeja Local Government' Area in Lagos State. The objectives are as follows:

To discuss the evolution and development of tax in Nigeria before, during and after colonial era. To evaluate the reasons for the high level of tax avoidance and tax evasion among traders in Ikeja Local Government. To identify the various sectors of the economy of Ikeja Local, Government that requires rapid development. ' To discover certain challenges facing effective personal income tax administration in Lagos State such as unqualified and incompetent tax officials, indiscriminate imposition, assessment and collection of taxes, etc. To find out why the rate of socio-economic development in Ikeja Local Government of Lagos State is low.

1.4   RESEARCH QUESTIONS

The research questions are as follows:

How does tax reflects the socio-economic needs of people in the society? How effective is the implementation of personal income tax by Lagos State Government? What is the compliance level by residents, firms and traders in Ikeja Local Government Area in terms of payment of taxes? To what extent has personal income tax been applied in the provision of infrastructures in Ikeja Local Government Area?

1.5 RESEARCH HYPOTHESES

The following hypotheses are formulated in this study:

Hypothesis I

Ho:    Personal income tax administration cannot facilitate socio-economic development of Ikeja Local Government Area.

H1: Personal income tax administration can facilitate socio-economic development of Ikeja Local Government Area.

Hypothesis II

Ho:    Low awareness and compliance level of personal income tax system' by most people in Ikeja Local Government Area is not a major reason for low tax revenue to the government.

H2:   Low awareness and compliance level of personal income tax system by most people in Ikeja Local Government Area is a major reason for low tax revenue to the government.

1.6 SIGNIFICANCE OF THE STUDY: EVALUATION OF PERSONAL INCOME TAX ADMINISTRATION AND THE SOCIO-ECONOMIC DEVELOPMENT OF IKEJA LOCAL GOVERNMENT AREA OF LAGOS STATE.

This study intends to indicate its meanings and values to the following groups:

Tax authorities In Lagos State and Ikeja Local. Government in particular will realize the need for improvement in the system of administrating of personal income tax, the need to recruit qualified personnel and devise effective method of imposing, assessing and collecting taxes from tax payers. The tax payers should be better enlightened about the essence of taxation in terms of its economic, social and cultural implications in a civilized society.

1.7 SCOPE AND LIMITATION OF THE STUDY: EVALUATION OF PERSONAL INCOME TAX ADMINISTRATION AND THE SOCIO-ECONOMIC DEVELOPMENT OF IKEJA LOCAL GOVERNMENT AREA OF LAGOS STATE.

The areas to be covered in the course of this study are: tax and taxation, personal income tax administration, the evolution and development of tax in Nigeria “characteristics of a good tax system, tax administration and the socio-economic development of Ikeja, problems facing tax authorities in ensuring an effective tax system in Lagos State, etc.

Major constraints or limitations of this study are stated as follows:

Inadequate information required for the study write-up. Poor attitude of respondents to research instruments. Insufficient funds for clerical and other related costs.(project topics   final year project topics )                                                 

Nevertheless, this research work will achieve its major objectives.

1.8   PLAN OF THE STUDY: EVALUATION OF PERSONAL INCOME TAX ADMINISTRATION AND THE SOCIO-ECONOMIC DEVELOPMENT OF IKEJA LOCAL GOVERNMENT AREA OF LAGOS STATE.

This research work has been arranged chronologically into five chapters as follows:

Chapter one provides a background the study, It "gets out the major problems prompting the research work. It clearly states the objectives of the study, the research questions for which answers must be provided, the research hypotheses that will be tested later (in chapter four), the relevance or significance of the study to both tax authorities and tax payers, the scope and limitations of the study, the study plan (which gives a total framework or arrangement of all the activities involved the study), the definition of key terms, and an historical background of the case study (Ikeja Local Government Area).

Chapter two concerns detailed discussion and explanation of relevant areas of the subject matter in a theoretical and conceptual manner, making references to related work carried out by some authors of textbooks, journals, seminar papers, etc.

Chapter three is the description of the methods adopted in conducting the study. It considers" the research design employed, the study population, sample size and technique, the sources of data, the validity and reliability of research instrument adopted, and the method of data analysis.

Chapter four involves the presentation and application of method of data analysis stated in chapter three. It also involves the testing of the stated hypotheses (hypotheses I and II) and making decisions 'based on the results of the analysis.

1.9   OPERATIONAL DEFINITION OF TERMS

a.    Personal Income Tax: A tax charged on the income of a person,

Society: A particular community of people, who share the same customs, laws, etc. Tax: A compulsory levy imposed by the government authority through its agents, on its (tax payers) or his properties to achieve some goals. Taxation: The process of imposing, assessing and collecting taxes. Tax Administration: The interpretation and application of tax laws into practice.

f. Tax Avoidance: An attempt to escape tax payment by capitalizing on the loopholes in tax laws.

Tax Evasion: A criminal attempt to escape tax payment by breaking tax laws.

h,    Taxable Person: A person on whom certain tax can be imposed.

Tax Laws: Legal instrument of fiscal policy that is derived from, adopted tax policies. Tax System: The process of taxation involving sets of rules, regulations and procedures with the organs of administration interacting with one another to generate funds for government.

1.10 HISTORICAL BACKGROUND OF lKEJA LOCAL GOVERNMENT AREA

Ikeja Local Government Area is an outer-ring suburb of the city of Lagos and capital of Lagos State. It is one of Nigeria's 774 Local Government

Areas (LGAs). It was founded by an Awori hunter-named 'Akeja Onigorun', after whom the area was named. To this day, the majority of residents in Ikeja are Awori.

Ikeja Local Government Area has numerous infrastructures and government organizations such as Federal Airports Authority of Nigeria with Vs headquarters on the grounds of Murtala Muhammed Airport. The Accident

Investigation Bureau of the Nigerian government is headquartered in Ikeja.

.

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How To Write Chapter Three Of Your Research Project (Research Methodology)

  • Methodology In Research Paper


    Chapter three of the research project or the research methodology is another significant part of the research project writing. In developing the chapter three of the research project, you state the purpose of research, research method you wish to adopt, the instruments to be used, where you will collect your data, types of data collection, and how you collected it.

    This chapter explains the different methods to be used in the research project. Here you mention the procedures and strategies you will employ in the study such as research design, study design in research, research area (area of the study), the population of the study, etc. You also tell the reader your research design methods, why you chose a particular method, method of analysis, how you planned to analyze your data.

    Your methodology should be written in a simple language such that other researchers can follow the method and arrive at the same conclusion or findings.

    You can choose a survey design when you want to survey a particular location or behavior by administering instruments such as structured questionnaires, interviews, or experimental; if you intend manipulating some variables.

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    A research design is used to structure the research and to show how all of the major parts of the research project, including the sample, measures, and methods of assignment, work together to address the central research questions in the study. The chapter three should begin with a paragraph reiterating the purpose of research. It is very important that before choosing design methods try and ask yourself the following questions: Will I generate enough information that will help me to solve the research problem by adopting this method?

    Method vs Methodology

    I think the most appropriate in methods versus methodology is to think in terms of their inter-connectedness and relationship between both. You should not beging thinking so much about research methods without thinking of developing a research methodology.

    Metodologia or methodology is the consideration of your research objectives and the most effective method and approach to meet those objectives. That is to say that methodology in research paper is the first step in planning a research project work.

    Design Methodology: Methodological Approach

    Example of methodology in research paper, you are attempting to identify the influence of personality on a road accident, you may wish to look at different personality types, you may also look at accident records from the FRSC, you may also wish to look at the personality of drivers that are accident victims, once you adopt this method, you are already doing a survey, and that becomes your metodologia or methodology.

    Your methodology should aim to provide you with the information to allow you to come to some conclusions about the personalities that are susceptible to a road accident or those personality types that are likely to have a road accident.

    The following subjects may or may not be in the order required by a particular institution of higher education, but all of the subjects constitute a defensible in metodologia or methodology chapter.

    Click here to complete this article - How To Write Chapter Three Of Your Research Project (Research Methodology)

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