THE EFFECTIVENESS OF TAX ADMINISTRATION IN NIGERIA (A CASE STUDY OF THE FEDERAL BOARDS OF INLAND REVENUE ILORIN, KWARA STATE)
The project title: effectiveness of tax administration in Nigeria is meant to explain in details the administration and management of tax in Nigeria fails means to enlighten and farouse consciousness on the students who intend going into the profession on the challenges besetting effective administration of tax in Nigeria and practical way by which it can be combated.
Chapter one deals with the introduction , statement of the problem , scope and justification of the study , aim and objectives of the study , research question research hypothesis ad operational definitions of technical terms.
Chapter two deals with review of related literature chapter three is on the research methodology adopted addressing the research problem.
Chapter four presents in precise and logical manner the presentation, analysis and interpretation of data collected and hypothesis formulated.
Chapter five presents the summary, conclusion and proffered recommendation.
TABLE OF CONTENTS
Table of contents
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 Scope of the study.
1.6 Significance of study
1.7 Research hypothesis
1.8 Limitation or study constrain of technical terms.
1.9 Definition of terms.
CHAPTER TWO LITERATURE REVIEW
2.2 Historical Review of taxation in Nigerian
2.3 Definitions of taxation in Nigerian
2.4 Importance of taxation in Nigerian
2.5 Canon of a good tax system
2.6 Type o f taxes.
2.7 Legal basis of taxation
2.7.1 Taxes collectable by federal government
2.7 2 Taxes and levels collectable by government
2.7.3 Taxes and levels collectable by local government.
2.8 Tax management and administration in Nigerian
2.8.1 Tax federal board of inland Revenue.
2.8.2 Composition of the board
2.8.3 Power and duties of the board
2.8.4 Joint Tax Board.
2.8.5 Composition of joint Board.
2.8.6 Duties of the joint Tax Board.
2.8.7 The state Board of interview of internal Revenue.
2.8.8 Composition of state board of internal revenue
2.8.9 Functions of state board of internal revenue
2.8.10 Local government revenue committee
2.8.11 Composition of local government revenue
2.8.12 The technical committees
2.8.13 Composition technical committee of federal
board of Internal revenue.
2.8.14 Function of he technical committee
2.8.15 The technical committee of state Board of
2.8.16 Composition of the technical committee
2.8.17 Function of the technical committee
2.8.18 Joint state revenue committee
Composition of joint state of revenue committee
2.8.19 Function of the joint state of revenue committee
2.8.20 Inspectors of taxes
2.8.21 Duties and powers of inspectors of tax
2.8.22 Collectors of taxes
2.8.23 Scrutinner committee
2.8.24 Duties and power of scrutinizer
2.8.25 Body of appeal commissioners
2.9 Problems in the administration of tax
2.10 Remedies to the problems of tax administration in
2.12 Tax collection in Nigeria
2.11.3 Procedures for collecting tax from companies
CHAPTER THREE: RESEARCH METHODOLOGY
3.3 Simple size
3.5 validity of research instrument
3.6 method of data analysis
3.7 constraint in data collection
CHAPTER FOUR: PRESENTATION OF THE RESULTS.
4.2 Questionnaire Distribution and collection
4.3 Analyzing data base on questionnaire collected.
4.4 Hypothesis testing and decision rule
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION.
1.1 BACKGROUND OF THE STUDY
Tax is a major source of government revenue. The tax system of any country usually has two component. Those are the law and it administration.
The tax laws are used to determine the liability of tax payers, the tax rate and the tax base. Tax administration whether effective or not used to determine the success or failure of any tax system. Different tax law (regulation, decrees etc) have been enacted in order to regulate the tax system. The success of any tax system of any country can only be anchored on effective tax administration for example when a tax payer has been assessed to tax and the amount of tax to be paid has been determined, the tax is to be collected at a minimum collection cost and because an effective tax administration ensures accountability of the government to the tax payers the amount so collected should be used to provide basic infrastructure that will be of benefit to the same tax payers on the other hands, if the administration is defective, there will be non- accountability, high collection cost, high rate of tax evasion and tax avoidance (the twin devils) corruption and so on.
Tax is the surest form of revenue among the source of receive to government because the citizen will always be there even when other source of revenue fail. For example, land might 80 barren, the oil wells might dry up, corporation might no longer be profitable but the citizen will always be there to be taxed.
Taxation can also be measured in terms of effectiveness as a fiscal policy tools.
Ordinary, taxation is used to correct any imbalances in the economy in order to achieve economic goal and development. The major objectives of taxation as a fiscal policy tool includes:
1) It is used to redistribute income or wealth
2) It is used to protect infant industries
3) It is also used to discourage the consumption of goods
4) It is also used to allocate resources
Therefore, taxation, whether as a source of revenue or as fiscal policy tool cannot succeed of its administration is defective or weak. As Tanzi (1980) has pointed out, tax administration plays a crucial role in determining the real or effective tax system, as opposed to statutory. Tax system Bird (1991) says “Tax policy change without administrative change is nothing”.
Considering the importance of effective tax administration, it is importance to establish a long-range vision for effective and suitable tax administration in Nigeria going by the present state of the tax administration in Nigeria. The purpose of this research is to consider the present tax administration in Nigeria with the aim of proffering feasibly solution to its shortcomings.
1.2 STATEMENT OF THE PROBLEM
Tax administration in Nigeria is the focal point of this study. Obviously there are some recognized problems confronting effective tax administration in Nigeria. These problems need to be recognized and solutions have to be proffered to them. Such problems include:
1) Inconsistency of tax policies
2) Poor legal structure
3) Lack of qualified tax personnel and officers
4) Poor information or data Bank and non-computerization of the tax system etc
These and other problems shall be looked into in this research work
1.3 OBJECTIVE OF THE STUDY
This study will be centered on the following:
1) Analysis of the problems related to the administration of the tax in Nigeria by attempting to identify observable problems which make tax administration ineffective.
2) Also to seek explanation to the inhibiting factors in the tax administration.
3) Why are the punitive measure put in place by the government has not been effective and efficiently carried out
4) Lastly, to form a basis for making suffusions towards reforming the tax administration in Nigeria
Also, we will look into how taxation as a fiscal policy can be effective in order to achieve the desired goal of economic stability.
1.4 RESEARCH QUESTIONS
Research questions can be defined as the specific purpose of the study stated in form of questions put forward in order to discover facts. Some important questions relevant to this research are as follows:
a) Has taxation as a fiscal policy took been effective in achieving the stabilization objectives of the economy.
b) Why do tax payers evade tax? Or why is there no voluntary tax compliance among tax payers?
c) Has the introduction of tax clearance certificate helped to reduce the high rate of tax evasion?
d) Can a tax payer reduce his tax liabilities without necessary evading tax?
e) With the employment of qualified personnel or training of existing officers improve tax collection?
1.5 RESEARCH HYPOTHESIS
Hypothesis can be defined as a conjectural or tentative statement on the relationship between two or more variables.
Hypothesis is usually means to an end for the purpose of this research; the following hypothesis will be tested for acceptance or rejection.
(1) Ho: Tax administration/management is not effective in Nigeria.
H i: Tax administration/management is effective in Nigeria
(2) Ho: Tax clearance certificate is not an effective tool to check tax evasion
Hi: Tax clearance certificate is not an effective tool to check tax evasion.
1.6 SIGNIFICANCE OF THE STUDY
It helped that this research work will be of great benefit to the government, tax consultants, policy makers, researchers that might be interested in making research on this topic, tax administrator’s students of public finance and taxation and the general public at large.
1.7 SCOPE OF THE STUDY
This is to appraise how the count could have an effective tax administration. The appraisal of taxes will be under the direct and indirect tax system acts have been enacted to regulate the administration has been shared between the federal, state and local governments.
The result of the appraisal of the strength and weakness of the present tax system will help in proffering workable solutions as the way forward.
1.8 LIMITATION OR STUDY CONSTRAINTS
The study obviously cannot cover all the geographical area of the country, hence, the Federal Board of Inland Revenue (FBIR) is used as the case study. Data collection is also limited to twenty (20) Because of these. The study will only limit to Federal Board Inland Revenue (FBIR) Ilorin, Kwara State.
1.9 DEFINITION OF TERMS
1) Direct Tax: this is a tax that is levied on the income, profits and gains of individuals and companies. In a direct tax system, the person who pays the tax bears the tax burden. Example includes personal income tax, companies income tax, petroleum profit tax.
2) Fiscal Policy: This is a part of government activities that deals with revenue generation and expenditure in an economy that is the policies that regulate such activities.
3) Indirect tax: This tax is levied on goods and services produced, under indirect tax system, the tax burden is usually shifted to the final consumer of goods and services. Examples include import duty, excise duty, value added tax e.t.c
4) Relevant Tax Authority: The relevant tax authority is a body responsible under law of a territory to impose tax on incomes or profits of individuals and companies.
5) Tax: This is a compulsory levy imposed on income of individuals and companies by the government.
6) Taxation: This is a system or the process of levying and collection of money by taxes.
7) Tax Avoidance: This occurs where a tax payer arranges his financial affair in such away as to reduce his tax liability such as capitalizing on the loopholes in tax laws to his own advantage.
8) Tax Clearance: This is a document issued to a tax payer after the tax authority is of the opinion that tax assessed on the income of a person for the three years immediately proceeding the current year of assessment has been fully paid or that no tax is due on such income.
9) Tax Evasion: This is a dishonest means whereby the tax payer try to reduce his tax liability through the use of illegal means such as omission of source(s) of income of a tax payer from his returns etc
10) Taxpayer: This is any individual, corporation sole, trustee or executor, having any income, which is chargeable to the tax under the provision of the act..