Taxation as a Major Source of Government Funds and the Impact on Management Decision Making (a Case Study of Kwara State Internal Revenue Service)
CHAPTER ONE
OBJECTIVE OF THE STUDY
This research work titled “Taxation as a major source of government funds and the impact on management decision making” with particular reference to Kwara state board of internal revenue, is aimed at:
1. Examining the impact of taxation on management decision making.
2. To evaluate the role of taxation in the development of Nigeria, Kwara state in particular.
3. Determining the various problems associated taxation in Kwara state.
4. And also proffer possible solutions to the problems identified.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Concept of Taxation
One of the simplest definitions of tax I have come across is one offered by the New Webster Dictionary of the English language. It describes ‘tax’ simply as a charge imposed by governmental authority upon property, individuals or transactions to raise money for public purposes. Tax is a compulsory extraction of money by a public authority for public purposes and taxation is a system of raising money for the purpose of governance by the means of contributions from individual persons or corporate bodies (Soyede and Kojola, 2006). According to the Oxford Advanced Learners Dictionary (2010), tax is money tax that has to be paid to the government. :People pay tax according to their incomes and it is often paid on goods and services, while Black’s Law Dictionary (2010) defines it as “monetary charge imposed by the government on persons, entities or property, levied to yield public revenue.” Ola (2005) defined taxation as the demand made by the government of a country for a compulsory payment of money by the citizens of the country. For Thomas Coolly in ICAN study pack (2006), taxes are defined as “enforced proportional contribution from person, property, levied by the state by virtue of its sovereignty, for the support of government and for all public needs. Nightingale (2007) described tax as a compulsory contribution imposed by the government and concluded that even though tax payers may receive nothing identifiable in the return for their contributions, they nevertheless have the benefit of living in a relatively educated, healthy and safe society. According to Soyede and Kojola (2006), taxation is defined as “the process of levying and collection of tax from fixable persons.” In both developed and developing economics, the primary purpose of taxation is mainly to generate revenue for settling government expenditure and for the provision of social amenities and the welfare of the populace. Taxation is used as instrument of economic regulation for the purpose of discouraging arid encouraging certain forms of behavior. Also tax may have objectives other than public revenue generation. However, the company income tax which contemplates the imposition of tax on companies is the major area of our concern. Company income tax is a tool to achieve economic growth in any country. Income tax is accepted not only as a means of raising the required public revenue, but also as an essential fiscal instrument for managing the economy Burgess,( 2003).
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine Taxation as a major source of government funds and the impact on management decision making. kwara State internal revenue service form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain Taxation as a major source of government funds and the impact on management decision making (a case study of kwara State internal revenue service)’. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of Taxation as a major source of government funds and the impact on management decision making
Summary
This study was on taxation as a major source of government funds and the impact on management decision making. Three objectives were raised which included: Examining the impact of taxation on management decision making, to evaluate the role of taxation in the development of Nigeria, Kwara state in particular, determining the various problems associated taxation in Kwara state and also proffer possible solutions to the problems identified. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from kwara State internal revenue service. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
Taxation as a concept is indispensable in all modem business. To this end, management of the business organization must not only know where it wants to be at the end of each business year, but also how it intends to get there. It is therefore the responsibility of tax planners of the business organization to explain and emphasize tax planning control as an essential requirement of modem day business decision management; it is inevitable for an efficient and effective conduct of business decision and for improving profitability and chances of growth. Therefore, management must be conscious of tax effect of their decisions so as to minimize the overall corporate tax liability and enhance the profitability of their firm.
Recommendation
With some percentage of every Naira as tax in almost every kind of business decision, the management of the company should recognize tax planning and management as a very important business function. The essence is to enable tax saving opportunities to be identified when it arise. All controllable transactions should be planned in the light of their tax consequences, because a company could do something about the tax effect before a transaction occurs, but can legally do nothing except to follow the tax law after transaction has already taken place. There is need for the establishment of a management information system (MIS) as a department of itself. The purpose of this department will be to collate information and make it available for tax planning and other related activities.
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