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PROJECT TOPIC- ADMINISTRATION OF COMPANIES INCOME TAX IN NIGERIA: PROBLEMS AND PROSPECTS (A Case of FIRS, Abakaliki)

PROJECT TOPIC- ADMINISTRATION OF COMPANIES INCOME TAX IN NIGERIA: PROBLEMS AND PROSPECTS (A Case of FIRS, Abakaliki)

ABSTRACT

The purpose of this research work is to pinpoint and examine or investigate the problems facing the administration of company income tax in Nigeria and to suggest or proffer solution to such problems identified. The FIRS was studied, the population of the study was all the FIRS offices across Nigeria. The sample size was choosen to be the staff of Abakaliki FIRS office. Questionnaires and oral interviews was used to collect data for the study. The data were analyzed with the use of simple percentage using tables, and hypothesis were tested with Chi-square (X2). The problems of company income tax administration identified by the study were; high level of corruption among various tax officials, poor tax payer education, inadequate manpower needs, tax evasion and avoidance, lack of adequate statistical information etc. The study also concluded with suggestions of possible measures to be put in place to curb the problems of the administration of companies income tax in Nigeria and its effects on the economic development of Nigeria. They include: Adequate manpower should be provided for the FIRS, Computers, and effective Postal and Communication system, Skilled personnel to meet up with the sophistication of tax evasion with the use of modern technology, over reliance on single source of revenue, adequate provision of social amenities for citizens (companies) to encourage voluntary tax payment and defaulters should be made to face the full wrath of the law. The researcher also recommended that among other things; that tax law should be made clear and unambiguous, improvement in the conditions of FIRS tax officials, provision of social amenities to citizens (companies) to encourage them to pay their tax, provision of staff quarters and (or) low cost estate.

CHAPTER ONE

INTRODUCTION

1.1. BACKGROUND OF THE STUDY

The company income tax is a paramount tool and very indispensible to the growth of an economy. Its impact to any economy from a global view point can neither be overstated nor overlooked, as it has served as a stimulus to economic growth in areas of fiscal and monetary polices. Facts obtained from prior (previous) research on the Nigeria economy, states that the taxation derived from companies has been grossly understated as a result of improper administration of the Nigerian tax system; in the assessment and collection of company taxes in any fiscal year.

Companies are known to be evading tax which is criminal in nature and also avoiding tax due to the various loopholes in the tax laws. The roles of taxation in promoting economic activity and growth are not felt, primarily because of its poor administration. According to Olashor (1999), the economy has remained in a deep slumber, all macroeconomic indicators show an economy in need of rejuvenation, deflation and indeed radical reforms.

According to the black law dictionary “Tax is a ratable portion of the produce of the properly and labour of the individual citizens taken by the nation, in the exercise of its sovereign rights, for the support of government for the administration of the laws and as the means for continuing in operation the various legitimate functions of the state “, the institute of chartered. Accountants of Nigeria (2008) and the chartered institute of Taxation of Nigeria (2002), opines that “Tax is an enforced contribution of money enacted pursuant to legislative authority”, if there is no valid statute by which it is imposed; a charge is not tax.

Tax simply means a compulsory levy imposed on citizens and corporate entities in an economy on gains or profit by the government for the provision of amenities. Tax is assessed in accordance with some reasonable rule of apportionment on persons or property within tax jurisdiction. The section (8) of CITA, 1990, makes it clear that taxes are payable as specified upon profit of any company accruing in, derived from, brought into, or received in Nigeria in respect of amongst others, any trade or business for whatever period of time the trade or business may have been carried out.

Taxation comes in form of personal income tax, company income tax, capital Gain tax, Education Tax, Petroleum profit tax, Value Added tax etc. the income Tax management Act (ITMA) if 1961 and subsequent amendment including: the finance (miscellaneous taxation provision) decree 1992 and the finance (miscellaneous taxation provision) decree 1997 and 1998 cover tax administration of companies in Nigeria.

The Act established the federal Board of Inland Revenue, which is the authority responsible for company taxation in Nigeria. This board also has an operational unit called the Federal Inland Revenue Services (FIRS). A critical challenge before company income tax administration in the 21st century Nigeria is to advance the frontiers of professionalism, accountability, honesty and awareness of the general public on the imperatives and benefits of taxation in our business lives which includes promoting economic activity, facilitating savings and investment does not for any reason meet the above challenges then there is a desperate need for reform in the areas of the tax regime we run and in the administration of taxes.

PROJECT TOPIC- ADMINISTRATION OF COMPANIES INCOME TAX IN NIGERIA: PROBLEMS AND PROSPECTS (A Case of FIRS, Abakaliki)

1:2 STATEMENT OF PROBLEM

All companies in Nigeria are statutorily mandated by Company Income Tax Act, 2004, to pay tax to the Federal Government on income profits made by them, so that government will be able to discharge her duties properly. But most researchers and or scholars, the likes of Sami 2007, Oluba 2008; Akpotoboro 2009 and Musa 2004 assert or reveals that the contribution of tax revenue especially from companies income have not met the expectation of the government.

The government has stressed this ugly situation equally and as a matter of fact has vowed to expand the non-oil tax revenue thus, this study therefore, is poised to look into the reasons company income tax is not meeting up to government expectations. Could this be due to laxity on the side of the tax authorities by poor tax administration or non-compliance with the tax laws by tax payers?

1.3. OBJECTIVE OF THE STUDY

The main objective of the study is to determine the problems of company income tax administration in Nigeria.

The specific objectives include:

  1. To determine the extent to which tax evasion and avoidance hinder the administration of companies income tax in Nigeria.
  2. To determine the extent to which poor tax payer education, lack of adequate statistical information, and absence of qualified manpower contribute to poor companies income tax administration.
  • To determine the extent to which the provision of adequate welfare services and other physical facilities encourage the effectiveness and efficiency of staff, thereby, helping to curb the problems of company income tax administration.

1.4. RESEARCH QUESTIONS

  1. To what level can tax evasion and avoidance be attributed to the problems of companies income tax administration?
  2. to what extent has poor tax payer education, lack of adequate statistical information, and absence of adequate manpower contributed to poor administration of companies income tax?

iii. To what extent can the provision of welfare services and other physical facilities encourage staff effectiveness and efficiency, thereby, help to curb the problems of companies income tax administration?

1.5. RESEARCH HYPOTHESIS

Ho: Tax evasion and avoidance cannot be attributed to the problems of companies income tax administration.

Hi: Tax evasion and avoidance can be attributed to the problems of companies income tax administration.

Ho: Poor tax payer education, lack of adequate statistical information, and absence of adequate qualified manpower does not contribute to poor companies income tax administration.

Hi: Poor tax payer education, lack of adequate statistical information and absence of adequate qualified manpower contributes to poor companies income tax administration.

Ho: Provision of welfare services and other physical facilities does not encourage staff effectiveness and efficiency, thereby, cannot help to curb the problems of company income tax administration.

Hi: Provision of welfare services and other physical facilities encourage staff effectiveness and efficiency, thereby, can help to curb the problems of company income tax administration.

1:6 SIGNIFICANCE OF THE STUDY

This study is set to reveal the problems of company income tax administration in Nigeria, also proffering solution to such problems of company income tax administration in Nigeria.

It also reveals the factors that facilitate the poor administration of company income tax in Nigeria and how it affects economic development of the nation.

It serves as a reference materials for subsequent researchers on the course of their works, tax agents, professional, authorities, the government (at all levels), public and private enterprises on studies concerning solution to the problems of company income tax administration .

Finally the  research work aids the partial fulfillment of the requirement of the award of Bachelor of Science degree in Accounting.

1:7 SCOPE OF THE STUDY

The study is centered on the Federal Inland Revenue Services with the Federal Inland Revenue Services Abakaliki as a case study therefore, the coverage area of the study is Ebonyi State, Abakaliki. The operations of FIRS in Nigeria is well organized in terms of companies income tax administration, as such the activities of one tax office is very similar to other tax offices

1:8 LIMITATION OF THE STUDY

The research work had some challenges like every other academic work. The constraints met on the course of the research work include: time, money and unwillingness of staff of the FIRS, Abakaliki to release some vital information needed for the work. There was not enough time as the researcher combines the tedious research work with normal semester academic work. There was not enough fund too as to employ all the necessary techniques needed to perfect the work.

PROJECT TOPIC- ADMINISTRATION OF COMPANIES INCOME TAX IN NIGERIA: PROBLEMS AND PROSPECTS (A Case of FIRS, Abakaliki)

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4 Comments

  1. Olusola May 9, 2016
    • Project Topics May 9, 2016
  2. Tony November 29, 2016
    • Project Topics November 29, 2016

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