Electronic Tax System, Tax Compliance and Revenue Collection Efficiency
Chapter One
OBJECTIVES OF THE STUDY
The general objective of this study is to examine the effect of the use and introduction of the e-tax system on the tax compliance among self-employed taxpayers and SME owners.
The study was guided by the following specific objectives;
- Examine the effect of the e-tax system on the tax compliance among self-employed individuals.
- Examine the effect of the e-tax system on the tax compliance among SME employees.
- Examine the relationship between the perceived ease of use and the electronic tax system.
- To establish the effect of the electronic tax system on revenue collection efficiency of the tax authority.
CHAPTER TWO
LITERATURE REVIEW
Conceptual Framework
E-Taxation: E-taxation is the system of collection and administration of tax procedure through an electronic medium. It is an online network through which the taxpayers have license to the platform via the use of internet, in other to have entrée into the facilities provided by the tax expert such as the registration for a tax identification number, electronic tax filing of tax returns (Olaoye & Atilola, 2018; Wasao, 2014).
In the USA, electronic taxation system was hosted in 1986; while in Australia, it was hosted in 1987. Canada introduced the practice of E-tax collection in 1993, while other industrialized states such as Malaysia and Netherlands started the use of E-tax collection in 2009. In Africa, Uganda started the use of E-tax collection in 2009, while Egypt introduced it in 2013.
In Nigeria e-tax system was hosted in 2015 by the Federal Inland Revenue Service (FIRS) in combination with Nigeria Inter – Bank Settlement System (NIBSS) in order to maintain a close nearness with the international trades towards automated payments systems, for e- government (Olaoye & Atilola, 2018). E-tax system was also introduced to upsurge revenue generation in Nigeria and for stress-free and convenience for tax payers to be able to pay taxes from diverse locations and at various time (Olaoye & Atilola, 2018; Okunowo, 2015). The following taxes are paid online in Nigeria by Nigerian taxpayer: Company Income Tax (CIT), Value Added Tax (VAT), Capital gains Tax (CGT), and Petroleum Profits Tax (PPT). When these taxes are paid via the online platform, taxpayer can applied and processed online his/her tax clearance certificate without visiting the office of the tax authority (Olaoye & Atilola, 2018; Abdulrazaq, 2015).
E-Payment and Revenue Collection
Though the major aim of Revenue Collection for most governments is to stimulate and guide the economic and social development of the country, there are several determinants for an effective realization of the exercise. As such County governments are successfully implementing E-payment to overcome the challenges of the corruption earlier experienced by the former city, municipal and county and therefore enhance optimal revenue collection. According to Balunywa et al. (2014), the use of Information Communication Technology (ICT), such as e-payment, would considerably increase the revenue collection as it helps tracking noncompliant revenue payers.
Thus, the implementation of e-payment is paramount in ensuring optimal revenue collection. Various ICT based revenue collection applications are available for use in the modern world today. These are simply referred to as Electronic Payment (E- payment) system (Ndunda, Ngahu & Wanyoike, 2015), integrated into revenue collection. The E-payment system is accessible online through Point of Sale (PoS) terminal devices and physical agents (such mobile phones, debit cards, agents, mobile money). The E-payment is intended to help the companies using it to eliminating or reducing and minimizing corruption (some of the problems inherent in the settlement and payment process), by allowing customers to pay their bills without having to actually move to the firm premises. The customers have access to their account information and even transfer money to other accounts in the comfort of their homes (Wahab, 2012).
Company Income Tax (CIT)
This is also refers to corporate tax. Corporate tax is a direct tax enforced by government on the revenue of a company. Some nations enforce such taxes at the national level, and a related tax may be enforced at state or local levels. Babatunde (2016) defined company income tax as a tax on the incomes of incorporated entities in Nigeria. This tax also comprises the tax on the incomes of non-resident businesses carrying on business in Nigeria. It is paid by limited liability companies inclusive of the public limited liability companies. It is therefore usually referred to as corporate tax. Company income taxes are charged on the incomes of business entities around the world (Andrew, Neville & Janet, 2012).
By law, Corporations are told to pay corporate duty in Nigeria dependent on the benefit. 30% is the sum charged on the benefit made in the first year of appraisal. Enterprises occupant in Nigeria is obligated for CIT on their general pay and non-inhabitant corporations are at risk just to CIT on their Nigerian-source pay.
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 constitute of individuals or elements that are homogeneous in description.
This study was carried out to examine electronic tax system, tax compliance and revenue collection efficiency. Selected tax officials, SME employees, self-employed individuals in Lagos State form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
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 hundred and twenty (120) questionnaires were administered to respondents of which 100 were returned. The analysis of this study is based on the number returned.
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS:
Introduction
This chapter summarizes the findings on the electronic tax system, tax compliance and revenue collection efficiency, Lagos State as case study. The chapter consists of summary of the study, conclusions, and recommendations.
Summary of the Study
In this study, our focus was on the electronic tax system, tax compliance and revenue collection efficiency, Lagos State as case study. The study is was specifically focused on examining the effect of the e-tax system on the tax compliance among self-employed , examining the effect of the e-tax system on the tax compliance among SME employees, investigating if there is a relationship between the perceived ease of use and the electronic tax system.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 100 responses were validated from the enrolled participants where all respondent are tax officials, SME employees, self-employed individuals in Lagos State.
Conclusions
With respect to the analysis and the findings of this study, the following conclusions emerged;
- There is an effect of e-tax system on the tax compliance of self-employed individuals.
- There is also an effect of e-tax system on the tax compliance of SME employees.
- There exists a relationship between perceived ease of use and e-tax system.
- There is an effect of electronic tax system on the revenue collection efficiency of the tax authority..
Recommendation
Based on the findings the researcher recommends that;
- So as to amplify the foreseen positive impact of the activity, government through Federal Inland Revenue Services should work out modalities on the best way to sharpen partnerships on the basics of E-tax collection.
- Government by means of Federal Inland Revenue Services must give useful, respectable, greatness and available site for one and all. Government ought to make versatile adaptation of electronic assessment entrance so as to build the appropriation rate by citizens as cell phones are in effect continuously utilized.
- Government by means of Federal Inland Revenue Services ought to guarantee that the arrangements of the laws which manage defaulters are executed. That is, ensuring that the defaulters are brought to book and managed in like manner.
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