CHAPTER ONE
INTRODUCTION
1.0 GENERAL DESCRIPTION OF THE STUDY
Taxation is one of the vital
parameter through which a nation or state enhances its growth and economic
development. The last decade or so, the
issue of domestic resource mobilizations has attracted considerable attention
in Nigeria tax system, seeing the major problem of tax evasion and avoidance
facing tax administration. It is not
surprising that many developing nations like Nigeria has been forced to adopt
stabilization and adjustment policies which demand better and more efficient
method of mobilizing drastic financial resource with the view of
circulating financial stability and
promoting economic development as well as growth ( Kiabel and Ninokah, 2009).
Taxation plays a crucial role in
promoting economic activity and growth.
Through taxation, government ensures that resources are channel towards
important project in our society, while giving support to the work. Unfortunately, today’s Nigeria economic
development is nothing to write home about.
The role of taxation in promoting economic activities and growth is not
felt primarily because of its poor administration. According to Olushore,
(1999), the economic has remained in the deep slumber, all macroeconomic
indicators shows an economy in dire need of rejuvenation, reflation and indeed
radical reform. Also in the view of Oni (1998), tax administration needs to be
revamped while refunds of tax as well as duty drawbacks administration are
inefficient.
A
critical challenge before E-taxation in Nigeria is to advance frontiers of
professionalism, accountability and awareness of the general public on the
important and benefits of taxation live which include the following;
Ø Promoting
economic activities
Ø Facilitating
savings and investment
Ø Generating
strategic comparative advantage if any tax administration does not for any
reason meet the above challenges, there is a desperate need to reform in the
area of tax regime we run and in the administration of tax.
For
the purpose of this research work, this study will look into the following;
Ø Knowing
the meaning of E-taxation administration in Nigeria
Ø To
understand the reasons for E-taxation administration in Nigeria
Ø Knowing
the chances of success of E-taxation administration in Nigeria.
1.2 HISTORY OF CASE STUDY ORGANIZATION
The
history of Imo state Board of Internal Revenue is traced to the provision of
section 33A(1) of ITMA as amended in 1993.
According to the Act, there shall be a board to know as the state Board
of Internal Revenue (herein after in this Act referred to as the state board),
whose operation aim shall be known and called State Internal Revenue Service
(herein after this act referred to as the state to administer income tax).
Therefore the board was originated from ITMA (Income Tax Management Act) and
this body was vested with authority revenue with effect of the Imo state board
of Internal Revenue (SBIR) was inaugurated on the 27th August 1991
with the separation of Abia State from Imo State having the board to be
composed as follows;
Ø The
chairman of the board as the executive head of the state service being a person
experience and approved by governor
Ø Three
(3) other persons nominated by the commissioner for finance in the state on
their personal.
Ø The
directors and head of department with the state revenue service.
Ø A
legal adviser from the state ministry of justice not below the rank of senior
state council.
Ø The
secretary to the state service who shall be an ex-office member.
The
board is also charged with such responsibility as follows;
Ø Assessment
of personal income tax (PITA) of all the residence of the state.
Ø Collection
and accounting for the personal income tax (PITA) of individuals with the
exception of the members in the police force and external affairs personnel.
Ø Collection
and accounting of tax from partnership.
Ø Advising
the government through the amendment for finance on tax matters which include
amendment of tax laws before laying such, amendment to or before discussion,
since the state board of internal revenue deals directly with the masses, it
can advise the JTB on the need for amendment.
1.3 STATEMNET
OF THE PROBLEM
The institutional framework within
the Revenue Administration operates impact directly on the effectiveness and
efficiency of E-taxation administration in Nigeria. The institutional framework
of operation in Nigeria is many and varied.
Another problematic aspect of
Nigeria’s E-taxation system is the location of the assessment and collection
functions within the tax administration, problems also emanates from frequent
charges in the tax law, every year annual budget estimates introduces new
measure and procedures, amend or cancel existing ones. These frequent changes
can make the law confusing as well as complicating the E-taxation structure.
After a few years, these changes and amendments become so many that the tax
payers finds it difficult to know which law are applicable.
1.4 OBJECTIVE OF THE STUDY
The main objective of the study is
to find out the problems that have been militating against e-taxation
administration in Nigeria.
Other
sub-objectives of the study include;
1. To
find out the causes of poor revenue collection in Nigeria.
2. To
examine if e-taxation administration will be more efficient when separated from
the civil service.
3. To
identify if poor e-taxation collection is because of pronounced poverty among
the tax paying public in Nigeria.
1.5 RESEARCH QUESTIONS
In
order to achieve the main objective of this study, the research will test the
question of;
1. What
are the problems militating against e-taxation administration in Nigeria?
2. Can
lack of staff training cause poor revenue collection in Nigeria?
3. Is
e-taxation administration more efficient when separated from the civil service?
4. Is
poor e-taxation collection the cause of poverty among the tax paying public in
Nigeria?
1.6 SCOPE OF THE STUDY
This study will focus on the
problems of E-taxation administration in Nigeria. The research work however has
experiences limitation by way of extracting information from some staff of Imo
State Board of Internal Revenue, Owerri, who for some reasons found it
difficult to respond to questions, but on conviction, on the relevance of the
research of E-taxation administration in the State complied without further hesitation.
1.7 ASSUMPTIONS
There are some things this research
work is expected to achieve and hope it will go a long way to finding lasting
solution to the problem of E-taxation administration in Nigeria.
The result of this case study
organization is expected to be replicated in other state board of internal
revenue nationwide. It is also expected that the recommendations and the
improvement of E-taxation administration made in this case study organization
will be applicable to other states board of internal revenue nationwide.
1.8 SIGNIFACANCE OF THE STUDY
There cannot be a better time to
work upon the critical problems of E-taxation administration in the 21st
Century than now especially with the growing tax consciousness among the
various governments in Nigeria.
The research will contribute to the
existing literature by focusing on E-taxation administration in Nigeria with a
view to identify the critical problems that are confronting the E-taxation
system so that appropriate measures could be taken to tackle them.
The work will be of immense benefit
to student of tax policy, E-taxation administration and taxation generally as
it will provide them insight into various challenges of tax administration.
The finding and recommendations
provided in the study will aside from helping to redirect the tax system, also
give tax practitioners the much needed background for better performance.
The study will also benefit the
government by identifying the problem of E-taxation administration in Nigeria
formulating tax policies and reviews.
1.9 DEFINTIONS
OF UNFAMILIAR TERMS
TAXATION:
According to Ekwereike (2004), this is a levy on individuals and corporate
bodies (Compulsory) by the government of the State (central or local
government) in order to finance the expenditure of that government and also as
a means of implementing its fiscal policy.
TAX
AVOIDANCE: A. U. Okafor, (2010), this
implies minimizing tax liability legally and by means of full disclosure of tax
authorities.
TAX
EVASION: this implies minimizing tax liability usually by not disclosing, that
one is liable to tax or by giving false information to the authority, evasion
is liable to serve penalty.
TAX
ADMINISTRATION: this is the organization and implementation of tax levy on
individuals and corporate bodies who are liable to pay tax.
E-TAXATION:
This implies a system that is connected to the internet, denoting either a real
time operation that is accomplished by a dialogue between a human operator and
dialogue between a computer or a system based on such operations.