COMPANY INCOME TAX ADMINISTRATION IN NIGERIA, PROBLEM, AND SOLUTION (A CASE STUDY OF FEDERAL INLAND REVENUE SERVICE, FIRS LAGOS STATE, IKEJA BRANCH)


COMPANY INCOME TAX ADMINISTRATION IN NIGERIA, PROBLEM, AND SOLUTION (A CASE STUDY OF FEDERAL INLAND REVENUE SERVICE, FIRS LAGOS STATE, IKEJA BRANCH)       

ABSTRACT:     

Government of today has a lot of ways of generating income or revenue to facilitate or finance its project, which may be difficult for individuals or corporate bodies to provide .Government income, is incomplete without sourcing from its citizen, companies and residual in its geographical location. Taxation may be defined as a compulsory levy imposed by the government on individual, corporate bodies, government parastatals; goods and services to enable government provide essential services to the citizens and also as instrument to stabilize economy.

The aim of this research project is to examine Company income tax Administration in Nigeria problem and solution using (Federal Inland Revenue Services as a case study).

In conducting this research work, the researcher used both primary and secondary data to gather relevant data. Questionnaire (both opened and closed ended questions) were administered to Federal Inland Revenue Service in Lagos State to source for relevant information that can used to provide solution to the problem under study. Interview was also used by the researcher where necessary. Secondary data used for this research were gathered from textbook, journals, handbooks and internet. Data collected was analyzed using frequency, simple percentage and Chi-square to test the hypothesis. The empirical result of this research project reveals that there is no effective and good operating tax policy in company income tax administration in Nigeria and that Taxes collected from companies are not used for economic development of the nation (Nigeria).

TABLE OF CONTENTS

Content                                            Page

Title page    -    -    -    -    -    -    -    -    -    -    i

Approval    -    -    -    -    -    -    -    -    -    -    ii

Dedication    -    -    -    -    -    -    -    -    -    -    iii

Acknowledgement    -    -    -    -    -    -    -    -    -    iv

Abstract    -    -    -    -    -    -    -    -    -    -    v

CHAPTER ONE:

INTRODUCTION

1.1     Background to the Study

1.2     Statement of the Problem

1.3     Objective of the Study

1.4     Limitation of Study

1.5     Statement of Research questions

1.6     Research Hypothesis

1.7     Significance of the Study

1.8     Scope of the Study

1.9     Definition of Terms

References

CHAPTER TWO:

LITERATURE REVIEW

2.1 Definition of Company Income Tax

2.2 Administration of Company Income Tax

2.3 Basis of Assessment of Company Income Tax Liability

2.4 Chargeable Income and Income exempted from Tax

2.5 Tax relieves and allowances granted to Companies

2.6 Allowable and Disallowable Expenses

2~7 Companies' Profit exempted from Taxation

2.8·' Problems of Administration of Company Income Tax

2.9 Effects of the problems on Taxation in Nigeria

2.10 Strategies employed by Companies to escape Tax

References

CHAPTER FOUR:

DATA PRESENTATION AND DISCUSSION OF FINDINGS

4.1 Data Presentation

4.2 Discussion of Findings

4.3 Method of Validity and Reliability Test

CHAPTER FIVE:

SUMMARY OF FINDING, RECOMMENDATION AND CONCLUSION

5.1 Summary of Finding

5.2 Conclusion

5.3 Recommendations

Bibliography

Appendix 1

Appendix 2

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND TO THE STUDY

It is not an overstatement that taxation plays a prominent role in the economy of any nation as one of the major means of generating revenue. In the past government derived more revenue from Company Income tax compared to any other sources of revenue but now reverse is the case and this is due to the ineffectiveness of the administrative machinery of Company Income Tax .i.e., Federal Inland Revenue Service (FIRS), the government policy and the conduct of the tax payers.

It was also observed by the Federal Inland Revenue Services (FIRS) that many Companies are in the habit of evading company income tax payment and this attitude has slowed down the growth of economy of the nation.

However, the various taxes collected by the government particularly the company income tax are used to provide social amenities like water, electricity, good road network, education, health care services and many more which in tum promote the standard of living of the citizens and residents of a nation. Without prompt payment of tax by the companies and other tax payers, the government may not be to fully play its expected roles to the citizens. In many of the developed and underdeveloped countries taxation has been the major source of revenue to the government unlike Nigeria where all attention is being concentrated on crude oil as the major source of income to the government.

Furthermore, taxation is a yardstick by which government regulates production and consumption of goods and this role attests to how taxation contributes to the growth ofa national economy but the reverse is the case in Nigeria system. The partial neglect of this source has turned the economy of the country into mono-economy and the revenue from this source can also be regarded to as mono-revenue.

In a tax system, the company income tax is a form of direct tax which the taxpayer themselves bear the burden. This is the reason why some companies try to evade the payment of such taxes compare to the indirect form of taxes in which the burden is transferable. This means that the finalusers of such goods bear the burden of such taxes indirectly.

Hence, many companies avoid tax or completely evade tax thereby reducing the total revenue of the government.

1.2     STATEMENT OF THE PROBLEM

In order for government to provide or perform its function to the society, there must be some means of imposing levy on individual and enthies: profit and income, and one of this is throughcompany income tax. In view of these, many business, government and Federal Inland Revenue Service have contributed to the problem being faced .by this source of revenue and some of those problems are:

1.    There is no effective and good operating tax policy of company income tax

2.    There is no thorough inspection of companies on the relief to be claimed by the Federal Inland Revenue Service.

3.    There is no effective 'Communication network between the Federal Inland Revenue Service and Companies.

4.    Government does not show full concern to company income tax.

5.    There is no severe punishment and fine for company that fails to register, make returns or evade tax.

6.     Inconsistent government policy on the administration of company income tax.

1.3     OBJECTIVE OF THE STUDY

The objective of the study is to determine the problem of company income tax administration in Nigeria and the proposed solution or way out to such problem.

1.4     LIMITATIONS OF STUDY

During the course of carrying out this research work, researchers were faced with financial constraint, and this is why it was not possible to travel to other states of the federation where offices of Federal Inland Revenue Service are located to collect some other needed or necessary information.

So, the findings were only restricted to the Federal Inland Revenue Service (FIRS) Ikeja branch of Lagos State.

Also, there was problem of restricted information, because some of the staff of the Federal Inland Revenue Service (FIRS), Ikeja was reluctant to fill the questionnaire administered to them while some refused to fill the questionnaire at all

1.5     STATEMENT OF RESEARCH QUESTION

The research work will attempt to answer the following questions:

1.    Does the government show full and adequate concern to company income tax as a source of revenue?

2.    Is the federal Inland Revenue Service (FIRS) thoroughly investigate the reliefs claiming by the companies?

3.    Is there any form of training and seminar for the personnel of Federal Inland Revenue Service?

4.    Is the Federal Inland Revenue Service educating and informing the companies at the appropriate time?

5.    Is there any good communication contact between the Federal Inland Revenue Service and Corporate Affairs Commission (CAC)?

6.    Does the Federal Inland Revenue Service and the government work hand in hands to ensure that new companies and unregistered ones are registered?

7.    Is there any penalty or fine for any company that failed to be registered, make returns or evade tax?

8.    .Does the Federal Inland Revenue Service ensure prompt collection of tax as at when due?

1.6     RESEARCH HYPOTHESIS

Hypothesis I

H0 (Null hypothesis): There is no effective and good operating tax policy of company Income Tax administration in Nigeria.

Hi (Alternative Hypothesis): There is an effective and good operating tax policy of company income tax administration in Nigeria.

Hypothesis II

Ho(Null hypothesis): Taxes collected from companies are not used for economic development of the nation.

H1 (Alterative Hypothesis): Taxes collected from companies are used for economic development of the nation.

Hypothesis III

Ho(Null hypothesis): FIRS and government does not work hand in hands to ensure that new companies and unregistered ones are dully registered with FIRS for tax purpose.

H (Alternative Hypothesis): FIRS and government work hand in hands to ensure that new companies and unregistered ones are dully registered with FIRS for tax purpose.

1. 7     SIGNIFICANCE OF THE STUDY

Since this study shed light on the administration of company income tax in Nigeria, the author humbly believes that the study will be of immense benefits to the government and administrative machinery (Federal Inland Revenue Service) in reforming the tax policy.

It would also enable the various companies who are paying company income tax to get good orientation on the importance of taxation and thereby stop evading tax.

1.8     SCOPE OF THE STUDY

This study looks at the administration of company income tax in Nigeria. In the light of this, the study will focus on companies within Lagos State. The companies and individual to be covered in this research work include:

i.     Tax Authority (Federal Inland Revenue Service Ikeja Office, Lagos)

ii.    Tax payers (Companies)

iii.     Tax Consultants

1.9     DEFINITION OF TERMS

Tax: It can be defined as money or charged compulsory levied or imposed by a public authority on the income of individuals and companies as stipulated by the government decrees, acts, or case law irrespective of the exact amount of service rendered to payer in return.

Taxation: This is the process or method of calculating and assessing an individual and companies as to the amount to be paid as tax liability.

Administration: This is the part of management which is concerned with the installation and carrying out the procedure by which, the programme is laid down and progress of activities is regulated and checked against plan.

Objective: Objective is an offspring of the mission statement of an organization which entails the breakdown of attainable goals a firm seek to attain and constitute the principal reason for a finn's existence.

Direct Tax: This is a form of tax levied by government on the income and revenue of individuals and companies in which the burden is not transferable. Examples are Personal income tax, Pool betting tax, Capital gain tax, Companies' income tax, Education tax, Withholding tax and Petroleum profit tax.

Indirect Tax: This is a form of tax imposed by the government on the value of goods and services. The incidence of payment falls on the tax payer while the real burden is shifted to the final consumer. Indirect taxes are only payable on consumption e.g. Value Added Tax (VAT), Import and Export duties, Custom duties, e.t.c,

Tax Evasion: This is a deliberate act on the part of the taxpayer not to pay tax due. It is a criminal act under the tax law because it is illegal.

Tax Avoidance: This refers to the legal means by which the taxpayers minimized their tax liabilities by taking the advantages of the loopholes in tax laws and regulation.

REFERENCES

Ola, C.S (1981): Income Tax for COll'Orate Bodies in Nigeria :Heinmann Educational Books, Ibadan

Seyi,Ojo (2003): Fundamental Principles of Nigeria Tax •• :SagribraTax?ublications, Lagos

.


TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.COM

Researchwap.com is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.com guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.com is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.com" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.