Below is a brief overview of this Project Work.
Format: MS WORD
| Chapters: 1-5
| Pages: 69
REVENUE GENERATION AND COLLECTION
PROPOSAL
INTRODUTION:
Generation of tax revenue from the private sector, especially from the self-employed people has always posed a problem. Millions of Naira has been lost due to prevalence of tax evasion and avoidance among the self-employed people. Consequently, taxation cannot be used as a major instrument for revenue generation and key to sustainable economic development, because this hinders the realization of fiscal objectives. Every year billions of naira are lost because of tax evasion and avoidance by the self-employed people (Ndulu,2003). Both the federal and state government have applied various measures to solve this problem but to no avail the question is; why is tax evasion and avoidance prevalent among the self- employed persons?
In all generation, the problems of personal income tax generation and administration continues to surface in one form or another in virtually every society, especially in this part of the world. It is important to point out that the federal government has taken adequate steps in effective tax administration.
This failure on the part of the federal government is responsible for poor financial positions of both the state and local government. Besides, this inadequate planning and absolute laws governing taxation, evaluation and collection is characterized by chaos.
This chaotic nature of the system can be appreciated by political influence or interferences in the process of taxation during the civilian administration in the country which gave rise to untrained and inexperienced personal being entrusted with the work of collection and administration of personal income tax.
The important of these issues to tax administration in the developing countries like. Nigeria, can be seen from the following extract from tax administration in under developed countries. The tax administration finds himself working with a staff which is inefficient in experienced, and poorly paid.
BOARD OF INTERNAL REVENUE ENUGU
The board of internal revenue Enugu was established to administer income tax in Enugu state just as there are likely to states of the federation.
Income tax was first introduced in Nigeria in 1904 by late Lord Lugard. The introduction of Native Revenue ordinance of 1927 was most difficult in the Eastern areas of the country, due mainly to absence of recognized central Authority Resistance to this form of direct taxation in such that it result to riots notably in calabar, Owerri and the famous, Aba women Riot of 1929 which was so severe that it attracted a probe. Beside, the Native Revenue ordinance were also Native direct taxation ordinance for the colony and the Native income tax ordinance.
These ordinance were late modified and incorporated into the Direct taxation ordinance No 29 of 1940, cap 54 and the income tax ordinance No 29 of 1943 respectively. The direct taxation ordinance 1940 empowered native authorities to tax Africans in their areas of jurisdiction while the income tax ordinance 1943 was for the taxation of non-Africans in companies. The two ordinances were the foundation of our modern taxation which necessitated establishment of board of internal revenue in each of the states of the federation which Enugu Board of internal Revenue is one of them.
STATEMENT OF THE PROBLEM
The assessment and collection of personal income tax from taxable person have been difficult in this country in spite of the tax laws and reforms in place. There is apathy not only on the part of the uneducated but also the educated. Having suggested that tax collection is one of the fundamental problems in income tax administration, the question then is how can this problem be surmounted? This study therefore, is an attempt to examine the problems of tax collection and administration in our tax system and also proffer suggestions for improvement.
RESEARCH METHODOLOGY
The instrument of investigation that will be us in this study will come from primary sources of data such of data such as personal interview, and questionnaires. Secondary source of data will also be used, this include, text books, journals and other related materials on this topic.
CHAPTER ONE
1.1 INTRODUCATION:
Generation of tax revenue from the private sector, especially from the self-employed people has always posed a problem. Millions of Naira has been lost due to prevalence of tax evasion and avoidance among the self-employed people. Consequently, taxation cannot be used as a major instrument for revenue generation and key to sustainable economic development, because this hinders the realization of fiscal objectives. Every year billions of naira are lost because of tax evasion and avoidance by the self-employed people (Ndulu,2003). Both the federal and state government have applied various measures to solve this problem but to no avail the question is; why is tax evasion and avoidance prevalent among the self- employed persons?
1.2 STATEMENT OF THE PROBLEM
In a bid to boost revenue generation and collection through tax from private sector, especially from the self- employed people, a lot of tax laws have been made and relevant tax authorities, collectors, and tax contractors have also been put in place to ensure effective tax collection and administration. But in spite of all this, there have been a prevalent problem of tax avoidance and evasion among the self-employed persons. This study tends to reveal the cause of this problem and the challenges of tax administration in private sector, especially the self-employed persons.
1.3 OBJECTIVE OF THE STUDY
The general objective of this study is to examine the nature and extent of the threat posed by personal income tax generation to the socio-economic development of the nation. The study equally will be dealing specifically with the following;
(a) To examine how decline in tax morality by self-employed persons have encouraged tax evasion
(b) To determine the extent to which the nature of tax administration in Enugu has contributed to the problems of personal income tax generation.
(c) To find out how the absence of strong deterrent punishment has contributed to the problem.
1.4 RESEARCH QUESTIONS
In order to carry out this study, the following research questions has been designed;
In what way has decline in tax morality by self-employed persons encouraged tax evasion and avoidance in Enugu State.
In what way has the absence of strong punishment for tax offenders contributed to the problem of personal income tax generation in Enugu.
In what ways have tax administration affected personal income tax generation in Enugu State.
1.5 RESEARCH HYPOTHESES
For the purpose of this research work, the following assumption are made;
1.5.1 H1: Personal income tax generation in Enugu State Board of internal
Revenue is very effective.
Ho: personal income tax generation in Enugu State Board of Internal Revenue is not very effective.
1.5.2 H1: There is a strong punishment measure for tax offenders in Enugu
State by the Board of Internal Revenue.
Ho: There is no strong punishment measure for tax offenders by the
Board of Internal Revenue Enugu State.
1.5.3 H1: Self-employed persons in Enugu State are ignorant of the importance of taxation.
Ho: Self-employed persons in Enugu State are not ignorant Of the Importance of taxation.
1.6 SCOPE OF THE STUDY
The problem of personal income tax generation is a national issue, but for lack of enough time to carry the research, this study therefore, focuses on the problem of personal income tax in Enugu State within the year 2010, with a case study on the Board of Internal Revenue Service Enugu.
1.7 SIGNIFICANCE OF THE STUDY
The significance of this study can be viewed from two major standing points: the practical significance and Academic significance.
1.7.1 PRACTICAL SIGNIFICANCE
This study will be significant to , and practically assist in broadening the understanding of the following;
The tax authorities: It will expose the relationship existing between the relevant variables of this study, which will be of interest to them in the Board of Internal Revenue.
To the income administrative organ of the state under study: It will reveal to a large extent the activities in the Board with regards to the relevant variables and comparative analysis of their action over some relevant years.
Most importantly, this research will present to the Board of Internal Revenue Service, analysis that could assist them in enunciating laws that will not only be effective but also revealing ways of implementing them.
1.7.2 ACADEMIC SIGNIFICANCE
In the academic environment, this study will prove to be significant in the following ways;
It will contribute to the enrichment of the literature on problems of personal income tax generation.
It will suggest ways of interest to academics based on empirical evidence of enhancing good personal tax administration in the State Board.
This study will serve as a body of reserved knowledge to be referred to by other researchers.
1.9 DIFINITION OF TERM
* RELEVEVANT TAX AUTHORITY: This is the revenue board responsible for the administration and collection of tax in the state(SBIRS).
*TAX EVASION: This is a deliberate attempt to escape the payment of tax
PROPOSAL
INTRODUTION:
Generation of tax revenue from the private sector, especially from the self-employed people has always posed a problem. Millions of Naira has been lost due to prevalence of tax evasion and avoidance among the self-employed people. Consequently, taxation cannot be used as a major instrument for revenue generation and key to sustainable economic development, because this hinders the realization of fiscal objectives. Every year billions of naira are lost because of tax evasion and avoidance by the self-employed people (Ndulu,2003). Both the federal and state government have applied various measures to solve this problem but to no avail the question is; why is tax evasion and avoidance prevalent among the self- employed persons?
In all generation, the problems of personal income tax generation and administration continues to surface in one form or another in virtually every society, especially in this part of the world. It is important to point out that the federal government has taken adequate steps in effective tax administration.
This failure on the part of the federal government is responsible for poor financial positions of both the state and local government. Besides, this inadequate planning and absolute laws governing taxation, evaluation and collection is characterized by chaos.
This chaotic nature of the system can be appreciated by political influence or interferences in the process of taxation during the civilian administration in the country which gave rise to untrained and inexperienced personal being entrusted with the work of collection and administration of personal income tax.
The important of these issues to tax administration in the developing countries like. Nigeria, can be seen from the following extract from tax administration in under developed countries. The tax administration finds himself working with a staff which is inefficient in experienced, and poorly paid.
BOARD OF INTERNAL REVENUE ENUGU
The board of internal revenue Enugu was established to administer income tax in Enugu state just as there are likely to states of the federation.
Income tax was first introduced in Nigeria in 1904 by late Lord Lugard. The introduction of Native Revenue ordinance of 1927 was most difficult in the Eastern areas of the country, due mainly to absence of recognized central Authority Resistance to this form of direct taxation in such that it result to riots notably in calabar, Owerri and the famous, Aba women Riot of 1929 which was so severe that it attracted a probe. Beside, the Native Revenue ordinance were also Native direct taxation ordinance for the colony and the Native income tax ordinance.
These ordinance were late modified and incorporated into the Direct taxation ordinance No 29 of 1940, cap 54 and the income tax ordinance No 29 of 1943 respectively. The direct taxation ordinance 1940 empowered native authorities to tax Africans in their areas of jurisdiction while the income tax ordinance 1943 was for the taxation of non-Africans in companies. The two ordinances were the foundation of our modern taxation which necessitated establishment of board of internal revenue in each of the states of the federation which Enugu Board of internal Revenue is one of them.
STATEMENT OF THE PROBLEM
The assessment and collection of personal income tax from taxable person have been difficult in this country in spite of the tax laws and reforms in place. There is apathy not only on the part of the uneducated but also the educated. Having suggested that tax collection is one of the fundamental problems in income tax administration, the question then is how can this problem be surmounted? This study therefore, is an attempt to examine the problems of tax collection and administration in our tax system and also proffer suggestions for improvement.
RESEARCH METHODOLOGY
The instrument of investigation that will be us in this study will come from primary sources of data such of data such as personal interview, and questionnaires. Secondary source of data will also be used, this include, text books, journals and other related materials on this topic.
CHAPTER ONE
1.1 INTRODUCATION:
Generation of tax revenue from the private sector, especially from the self-employed people has always posed a problem. Millions of Naira has been lost due to prevalence of tax evasion and avoidance among the self-employed people. Consequently, taxation cannot be used as a major instrument for revenue generation and key to sustainable economic development, because this hinders the realization of fiscal objectives. Every year billions of naira are lost because of tax evasion and avoidance by the self-employed people (Ndulu,2003). Both the federal and state government have applied various measures to solve this problem but to no avail the question is; why is tax evasion and avoidance prevalent among the self- employed persons?
1.2 STATEMENT OF THE PROBLEM
In a bid to boost revenue generation and collection through tax from private sector, especially from the self- employed people, a lot of tax laws have been made and relevant tax authorities, collectors, and tax contractors have also been put in place to ensure effective tax collection and administration. But in spite of all this, there have been a prevalent problem of tax avoidance and evasion among the self-employed persons. This study tends to reveal the cause of this problem and the challenges of tax administration in private sector, especially the self-employed persons.
1.3 OBJECTIVE OF THE STUDY
The general objective of this study is to examine the nature and extent of the threat posed by personal income tax generation to the socio-economic development of the nation. The study equally will be dealing specifically with the following;
(a) To examine how decline in tax morality by self-employed persons have encouraged tax evasion
(b) To determine the extent to which the nature of tax administration in Enugu has contributed to the problems of personal income tax generation.
(c) To find out how the absence of strong deterrent punishment has contributed to the problem.
1.4 RESEARCH QUESTIONS
In order to carry out this study, the following research questions has been designed;
In what way has decline in tax morality by self-employed persons encouraged tax evasion and avoidance in Enugu State.
In what way has the absence of strong punishment for tax offenders contributed to the problem of personal income tax generation in Enugu.
In what ways have tax administration affected personal income tax generation in Enugu State.
1.5 RESEARCH HYPOTHESES
For the purpose of this research work, the following assumption are made;
1.5.1 H1: Personal income tax generation in Enugu State Board of internal
Revenue is very effective.
Ho: personal income tax generation in Enugu State Board of Internal Revenue is not very effective.
1.5.2 H1: There is a strong punishment measure for tax offenders in Enugu
State by the Board of Internal Revenue.
Ho: There is no strong punishment measure for tax offenders by the
Board of Internal Revenue Enugu State.
1.5.3 H1: Self-employed persons in Enugu State are ignorant of the importance of taxation.
Ho: Self-employed persons in Enugu State are not ignorant Of the Importance of taxation.
1.6 SCOPE OF THE STUDY
The problem of personal income tax generation is a national issue, but for lack of enough time to carry the research, this study therefore, focuses on the problem of personal income tax in Enugu State within the year 2010, with a case study on the Board of Internal Revenue Service Enugu.
1.7 SIGNIFICANCE OF THE STUDY
The significance of this study can be viewed from two major standing points: the practical significance and Academic significance.
1.7.1 PRACTICAL SIGNIFICANCE
This study will be significant to , and practically assist in broadening the understanding of the following;
The tax authorities: It will expose the relationship existing between the relevant variables of this study, which will be of interest to them in the Board of Internal Revenue.
To the income administrative organ of the state under study: It will reveal to a large extent the activities in the Board with regards to the relevant variables and comparative analysis of their action over some relevant years.
Most importantly, this research will present to the Board of Internal Revenue Service, analysis that could assist them in enunciating laws that will not only be effective but also revealing ways of implementing them.
1.7.2 ACADEMIC SIGNIFICANCE
In the academic environment, this study will prove to be significant in the following ways;
It will contribute to the enrichment of the literature on problems of personal income tax generation.
It will suggest ways of interest to academics based on empirical evidence of enhancing good personal tax administration in the State Board.
This study will serve as a body of reserved knowledge to be referred to by other researchers.
1.9 DIFINITION OF TERM
* RELEVEVANT TAX AUTHORITY: This is the revenue board responsible for the administration and collection of tax in the state(SBIRS).
*TAX EVASION: This is a deliberate attempt to escape the payment of tax
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