Tax information management system
1.1 BACKGROUND OF THE STUDY
Information Management System provides information that organizations need to manage themselves efficiently and effectively. Information Management System are typically computer systems used for managing three primary components: technology, people (individuals, groups, or organizations), and data (information for decision making). Information Management systems are distinct from other information system, in that they are used to analyze and facilitate strategic and operational activities. Academically, the term is commonly used to refer to the study of how individuals, groups, and organizations evaluate, design, implement, manage, and utilize systems to generate information to improve efficiency and effectiveness of decision making, including systems termed decision support system, expert system, and executive information systems.
The major source of government revenue in any country is from taxation. Any government, that really wants to succeed and fulfill its economic, legal, political, and technological objectives must ensure that its taxation system is not only expansive but rather possesses the principles of equity, certainty, convenience, economy, simplicity, neutrality and efficiency. Federal, State and Local Governments have Constitutional powers to assess, impose or levy taxes, collect, account for such taxes and utilize the taxes so collected for the administration of government activities as stipulated by the Constitution. The tax system therefore should be robust enough to generate adequate revenue to be used to finance the public.
Managers of tax system are becoming aware of the fact that the introduction of computerized information system generally means restructuring administrative systems, which is a time and management intensive undertaking that is full of opportunities. The way the tax system is organized and managed rather than the precise configuration of hardware and software is usually the primary determinant of the success of the information technology. In all cases, studies covered in this project work proved that the employment of information technology has been a tool to build or enhance operations of a modern tax administration.
The advancement of micro computing technologies and local area networks, and the wide spread use of 4th generation computer software languages has enabled tax department to take control of the computer system and use them as an integrated part of the administrative processes. Changes in the application of information technologies can be made quickly and cheaply as the administrative procedures are altered. Once expertise within the tax administration has been developed, changes can be made to the information system as part of the normal operations of the department not requiring a reliance on outside expertise. In all cases, information technologies have been used to increase the quantity and quality of the information available to the tax administration.
The role which information technology should play in the tax reform process cannot be overemphasized. But installing computers and writing software to assist the tax administration is no substitute for political willpower, it should be backed-up with sound assessment and enforcement procedures which are the critical element for enhancing tax payer compliance. Without these key ingredients in place, computerization can easily serve as a way to absorb technical assistance and camouflage the fact that little or no fundamental progress is being made on the reform. If the essential political, legal and administrative elements for tax reform are being put in place, then modern information technology can be a powerful tool to enhance the capabilities of the reformed system.
1.2 STATEMENT OF THE PROBLEM
The rate of tax collection to the Gross Domestic Product , GDP, is very low due to the inability to compute, assess and collect taxes on businesses. Other problems encountered in the tax department include:
- There have been incidents of high rate of forgery of official documents such as tax receipts and other fraudulent practices in the issuance of tax clearance certificate.
- The prevalence of tax evasion and tax avoidance is on the increase.
- Manufacturers are groaning under the burden of multiple or double taxation.
- Monthly financial statements were not regularly generated and it normally takes a while before the annual accounts are prepared and submitted for audit.
- Returns received from the ministries and agencies are often not adequate.
- The returns are also not analyzed in the form that can be collated directly into the accounts; hence analysis has to be carried out by the Cash Book Control unit.
Hence there is a need for the computerization of the taxation information management system with a centralized database to enhance better services.
1.3 THE AIM AND OBJECTIVES
The aim of this project work is to design and implement a computerized taxation information management system for the department of tax Ebonyi State ministry of internal revenue. The objectives include:
- To build a system with a centralized database to take care of taxpayers information.
- To build a module that will enable tax managers to query the system and discern whether an individual or a business organization has paid their tax.
- To build a module that will enable tax managers to register people in the system.
- To build a module with electronic invoicing facility.
- To build a system with strong security features such as admin login and regularly updated antivirus.
1.4 SIGNIFICANCE OF THE STUDY
Computers have tremendously improved the way businesses operate in their respective industries. Technology has advanced so remarkably that those who are not using computers in their business are at a major disadvantage against their competitors. Computerization of tax and revenue information management system can contribute to reaching the goal of good (financial) governance. It improves accountability, transparency, organization and speed of the revenue authorities. Nevertheless, while computerizing and modernizing the tax system is an essential part of improving domestic resource mobilization; such a reform will be sustainable only in conjunction with more profound changes in the administrative and political structure of a state. Furthermore, it is necessary to pay tax, to make money available to government for the provision of infrastructure (water, electricity, roads, etc,) necessary to create the enabling environment and as such a more organized system of tax information management is essential for the growth and development of the state in general.
1.5 SCOPE OF THE STUDY
The study is narrowed down to taxation information management system of the tax department in the Ebonyi State ministry of internal revenue. It focused mainly on information management of direct tax of: banks, insurance companies, hotels, corporate organizations and individuals. The system is designed to incorporate a database to take care of the tax information data and the status of each registered body.