PROJECT TOPIC- TAX ADMINISTRATION IN NIGERIA PROBLEMS AND PROSPECTS (A STUDY OF EBONYI STATE BOARD OF INTERNAL REVENUE)
This research work is an attempt to appraise Tax Administration in Nigeria with a particular reference to Ebonyi State Board of Internal Revenue Services (EBIRS). The main objective of this study is to evaluate the problems and prospects of tax administration in Nigeria. Significally the study sough to examine the effects of tax avoidance and tax evasion and to identify the economic indices of tax administration in Ebonyi State, the researcher adopted two main sources of data collection, thus: primary questionnaires was administered on the selected population sample size of one hundred and fifty (150) staff of Ebonyi State University Board of Internal Revenue services. putting into consideration the historical nature of this research the researcher adopted a descriptive approach to present the facts and figures about the research topic. Three (3) hypotheses were formulated and tested using the data from returned questionnaires. The findings of this research revealed that: the existing tax laws are inadequate for effective tax administration in Ebonyi State and as such the existing tax system posses a serious problem to the tax administration in Nigeria the greater the effectiveness of tax administration in Ebonyi State. the study therefore recommended the promotion of appropriate legislation to give force to activities of appropriate tax authorities, information technology to meet with the tax information requirement of the modern time and the training and retraning of staff in tax related fields as it’s through these means the prospects will far out weigh the problems of tax administration in Ebonyi State.
BACKGROUND OF THE STUDY
During the pre-historic days, taxes have been the ultimate source of government revenue through over-loading; weaker nations were made to pay taxes to stronger ones. Subsequently, it became an institutionalized means of financing government activities. In Nigeria, Taxes had been a big source of income to the administrators even before the country was overtaken by the Colonialists Post-Colonial days witnessed great improvement in tax administration.
Consequently, many factors came in to interplay owing to the intensions of the colonialists. Legislations were made concerning the method of administration and penalties against default. However, there are a lot of problems characterizing tax administration in Nigeria; some of these problems have persisted while some others had been tackled by various administrations in the past.
Suffice it to say that these problems are fundamental to achieving the objectives, as far as tax payment and tax usage is concerned. Differently, tax administration in Nigeria still leaves much to be desired. Be that as it may, it is quite arguable that tax administration can be improved. There are some good prospects, which can only be realized through perceptible improvement in various areas.
Essentially, this research work has to consider the problems in the administration vis-a-vis the good prospects that are likely to accrue. In every country, there are some services, which the government must provide to the citizens because of their essential nature. The services are indispensable in the life of the people that individuals or corporate bodies are not allowed to provide them in some places where they are allowed, they are not allowed to monopolize the supplies or the production.
The reason why government does this is to ensure that the supply of such goods and services are evenly distributed in any given society so that the rich and the poor will benefit. The provision of such essential services involves huge amount of expenditure. At times one may ask, “How does government get such huge amount to finance the supply of such essential goods and services to her citizenry”?
It is true that government mints money, but there are other important economic factors that should be considered so that excessive money is not in circulation in an economy. For an economic balance to be maintained in an economy, government must provide ways of financing her activities. One sources of such finance is the contribution made both private and public sectors to the government in form of fees, Levis and taxes.
Basically, this research work seeks to unearth the facts about tax administration in Nigeria. It is multi-dimensional, however, as it will look at the problems associated with the administration, both on the side of the government and on the side of the taxpayers. On the other hand, it will try to give a picture of positive prospects, which the government, the taxpayers and the society at large will gain through improved administrative.
PROJECT TOPIC- TAX ADMINISTRATION IN NIGERIA PROBLEMS AND PROSPECTS (A STUDY OF EBONYI STATE BOARD OF INTERNAL REVENUE)
1.2 STATEMENT OF THE PROBLEM
Tax administration in Ebonyi State has brought a colossal loss of government revenue arising from tax evasion and tax avoidance both of which are symptoms of inadequacies in tax planning and administration. The situation is so bad now that it would not appear an exaggeration to say that not less than three quarters of potential tax revenue is lost annually. There are some administrative problems, which hamper the planning of feasible strategies for improving tax administration in Ebonyi State to boost the much-desired revenue drive in the State.
The following are some of them: Poor quality staff, Inadequate staffing with attendant ineffective staff rationalization, Tax evasion and avoidance, Bureaucratic bottleneck, Ineptitude on the part of other arms of government, eg failure to demand income tax clearance certificate before granting government patronage, Inadequate training of staff with a resultant lack of knowledge of over changing taxes laws, Wrong sitting of revenue offices, Inadequate office accommodation and associated requirements, Inadequate staff welfare scheme, Poor communication, Lack of reasonable internal checks, Lack of information, Extravagant and unreasonable government expenditure pattern, Irresponsible and envy-provoking life style of people in government, Inadequate public enlightment insufficient statistics on population and professions.
1.3 OBJECTIVE OF THE STUDY
The broad objective of this study is to evaluate the problem and prospects of Tax Administration in Nigeria using Ebonyi State Board of Internal Revenue as a reference point. Specifically the study sought to:
- To find the effect of tax avoidance in the administration of tax in Ebonyi State.
- To examine the effect of tax evasion on the administration of tax in Ebonyi State.
- To identify the various economic indices that affects tax administration Ebonyi State.
1.4 RESEARCH QUESTION
In order to get to the root of the research topic, it was quite fundamental to articulate questions, that will serve as cardinal points to the multi-dimensions, the researcher would take to ensure that everything is about tax administration, particularly in Ebonyi State, is brought to the surface. They included:
- What is the effect of tax avoidance on the administration of tax in Ebonyi State.
- To what extend does tax evasion affect tax administration in Ebonyi State.
- What are the economic indices that affect tax administration in Ebonyi State.
1.5 RESEARCH HYPOTHESIS
Based on the statements of problems, as well as the purpose of the study, there was the need for stating the hjypotheses that would act as guide for this research work. the hypotheses might be true or false depending on the outcome of their experimentnal test.
Ho: The training and re-training of staff in the ever-changing tax systems as well as laws have negative effect on the Tax Administration.
HA: The train and re-train of staffs in the ever-changing tax system as well as laws have positive effect on the tax administration.
Ho: The existing tax laws are not adequate for efficient tax administration and therefore provide loopholes for ineffectiveness.
HA: The existing tax laws are adequate for efficient tax administration and therefore, can bring about effectiveness.
Ho: The tax system in Nigeria has not been effective to bring about equitable distribution of tax burden.
HA: The tax system in Nigeria has been effective to bring about equitable distribution of tax burden.
1.6 SIGNIFICANT OF THE STUDY
(1) Tax avoidance has no significant effect on tax administration in Ebonyi State.
(2) There is no significant effect of tax evasions on tax administration in Ebonyi State.
(3) Economic indices do not have significant effect on tax administration in Ebonyi State.
1.7 SCOPE OF THE STUDY
It was quite natural that the researcher would found it extremely difficult, if not impossible, to travel the whole length and breadth of Nigeria to carry out this study. Consequent upon that, the scope of the study has been limited to Ebonyi State. Obviously, the trends as obtainable in this State as far as tax matters are concerned could be said to be the general situation nation wide. In other words, the findings in Ebonyi State could be used to generalize the situation in other parts of the country.
- 8 LIMITATION OF THE STUDY
The need for this study bears from the currents troubling tax administration in Ebonyi State in particular and in Nigeria, in general. Therefore, this study seeks to find solution to the problems identifiable through historical and empirical approaches. The discoveries and suggested solutions by this research work will be useful to the government and the taxpayers.
Specifically, the Board of Internal Revenue and Inland Revenue found this project useful. It serves as light unto their path to see structural problems associated with tax administration and would, however, make it instructive for them to make amend. It is, however, pertinent to state that the Ebonyi State Board of Internal Revenue is the researcher’s main point.
Finally, the members of the public already polluted with psychological depression regarding tax matters would, no doubt, found this study very important because it addressed this disorder. When they were aware of the importance of proper tax system and tax payment and the demerits of avoiding and evading tax – which, undoubtedly, are quite untoward to good tax administration.
1.9 DEFINITION OF TERMS
In the light of the foregoing, it was important to state that there are some limiting factors, which the researcher unavoidably battled with, they include the following:
Time: As earlier on stated, this study cannot actually cover the whole Nigeria due to time factors. The time frame cannot avail the researcher the opportunity of making contacts across the country. There is even, no gain saying that the researcher did not strike a balance between conducting this research and attending to other academic demands, such as going to the lectures and studying for imminent examination,
Finance: This research was handicapped by inadequate provision of fund to get to the extent naturally required by the researcher. For instance, it was practically hard to reach to all the points that form the universal set for this research that is Ebonyi State. The high cost of transport resulting from the current scarcity of fuel biting hard on the populace even aggravates the problems of finance. The vicious effect of the increase in transport cost has reached other economic areas such that even procurement of stationery and similar necessaries became problematic;
Information Gathering: Given the disposition of an average person in Nigeria to information disclosure, it is a monumental problem to elicit the vital information from the supposed right sources. Many people are naturally conservative in letting out information. Unfortunately, that called for serious persuasion in order to get them indulge in the activities of the researcher. In this regard, the use of questionnaire has to be applied to reduce the problem to the barest minimum. Moreso, the researcher was constrained by the quality of the pieces of information gathered which were hardly realistic. The use of questionnaire will greatly check against bias and thereby ensure improved quality of information gathered.
1 Fallacy: A mistaken idea capable of bringing about misplacement of priorities involving tax matters with attendant negative consequences.
- Cannon: The driving force that pushes the socio-economic and political environment to yield positively to a tax system.
- Incidence: The extent of the effect pf taxation on the taxpayers and in the field of application.
- Framework: The structural arrangement against which tax administration was based; the organizational pattern of administering tax policies and programmers.
- Historical: Researching on the basis of historical facts and figures and drawing conclusions on mere historical antecedents.
- Survey of Case Study: Researching on the basis of present facts and figures and drawing conclusions through analyzing the data (facts and figures) against projected outcomes.
- The Issue: The subject matter of a research; the problem which the research seeks to address.
- Element: Single unit that makes up the object of study i.e. the population.
- Strata: Collectives word for classes or categories of the elements (respondents) in the sample size, hence a stratified area of study (population) is the object of this project.
- Field Work: The actual researching activities involving oral interviews use of mere commentaries and administration of the
- Percentage Statistical Techniques: Analyzing the statistical data simply using percentage in order to determine the varying degrees of the reactions of the respondents.
14. Vacant: Leaving a question in the questionnaire unanswered by the respondents.