An Appraisal of the Administration of Personnel Income Taxation (A Case Study of Sokoto State Board of Internal Revenue)
Chapter One
OBJECTIVES OF THE STUDY
The objectives of the study are as follows:
- To review, in detail, the operations of personal income tax in Sokoto State in order to establish their success or otherwise in the generation of revenue for Sokoto state government.
- To ascertain the meaning and nature of the tax, especially the context of the administration of personal income taxation in Sokoto State.
- To determine which and what income are liable to tax and the level of compliance by those who are liable.
- To identify the factors that impinge on the effective administration of personal income tax in Sokoto State.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
INTRODUCTION
The chapter is devoted to the review of related literature and method used in collecting data on the topic of study. It is expected that in the course of this review the concept of taxation would be defined and explained with special interest on the personal income tax administration in Abia state. According to Chartered Institute of Taxation of Nigeria Tax guide and Statutes, Nigerian tax law is purely statutory, the tax system thus features a wide mixed range of statutes by which various governments in the country seek to charge and collect revenue for public expenditure. Of these, the most widely based are income taxation. The personal income tax act makes provision for the country, adding that liability to personal income tax in Nigeria does not depend on the domicile or nationality of the tax payer (Abdulrazaq, 2002:4).
Principles of Taxation.
Adam Smith is the author of the famous four cannons of taxation. He enunciated them as follows:
- Certainty: This stipulates that the tax payers should be made certain of the amount to be paid, time, place and method of payment. These clarifications will no doubts enable the tax payer pay with ease.
- Convenience: According to Adam Smith, there should be a convenient time, place and method of tax payment and collection. For instance a tax payer should not be made to travel over a long distance to pay his tax. Just as pay as you earn (PAYE) satisfies that principle of convenience for salary earners in terms of tax payments, harvest periods for farmers is a more convenient time for tax payment etc.
- Proportionality: Smith also stated the need for proportionality by this he explained that the amount of money individuals pay as taxes should be proportional to their income. In other worlds, a uniform proportion of 10% of income paid as taxes by all categories of taxpayers should satisfy this principle. This principle has been variously criticized by scholars who also expanded it to include other factors that will make for equitability of a good tax system.
- Economy: This he explained is the yield of good tax. That is to say that the different between the tax collection and the cost of its collection, should be reasonably high. He reasoned that tax revenue minus cost of collection equals to yield and the yield must be positive because if the outcome is negative, it means that the yield is less that the cost of collection, meaning that the tax in question is not economic. Since the essence of revenue tax is not strictly speaking the extend of tax yield as explained by this principle, it means that all of Adams Smiths taxation cannot be taken hook line and sinker, some adjustments has to be made here and there is fine tune to present day tax reality.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to an appraisal of the administration of personnel income taxation
Sources of data collection
Data were collected from two main sources namely:
(i)Primary source and
(ii)Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
Population of the study
Population of a study is a group of persons or aggregate items, things the researcher is interested in getting information on an appraisal of the administration of personnel income taxation. 200 staff of sokoto state board of internal revenue were selected randomly by the researcher as the population of the study.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain an appraisal of the administration of personnel income taxation. 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 administration of personnel income taxation
Summary
This study was on an appraisal of the administration of personnel income taxation. Four objectives were raised which include: To review out, in detail, the operations of personal income tax in Sokoto State in order to establish their success or otherwise in the generation of revenue for sokoto state government, to ascertain the meaning and nature of tax, especially the context of administration of personal income taxation in Sokoto State, to determine which and what income are liable to tax and the level of compliance by those who are liable,tTo identify the factors that impinge on the effective administration of personal income tax in sokoto State. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of sokoto state board of internal revenue. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made of tax managers, assistant tax managers, officers i and officers ii were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
The importance of tax revenue to governments at all levels makes the issue of tax evasion a very noisome one to tax authorities. Several states of Nigeria have resorted to boosting their revenue base through internal generated revenue, hence the need to enforce compliance to achieve this goal. The findings from the study are revealed that high tax rates; poor relationship between taxpayers and tax authority and weak tax penalties are disincentive to tax compliance in Nigeria.
Recommendation
Apart from the existing punishment and penalties for tax offenders, efforts should be made such that maximum publicity of cases prosecuted are carried out in order to serve as a deterrent to others. The revenue officials should be adequately equipped to ensure that defaulters are brought to book.
The tax authority should consider the tax payers as partners in progress. They should maintain a cordial relationship with tax payers to foster voluntary compliance.
The government should refrain from the tradition of arbitrary hike in tax rates as this jeopardizes the convenience criterion of a good tax system and consequently discourages compliance.
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