Abstract
This
research work titled; challenges of revenue generation in Nigeria is borne out
of the desire to examine the problem associated with revenue generation in
Nigeria and to proffer solution thereto. Revenue Is the fulcrum of development
in any state, for no state can effectively function and carry out its numerous
duties
TABLE
OF CASES
Agberuagba
v. Attoney General O gun State (1985) INWLR (pt3) 395…
Anarawos
timber trading company Ltd. NWLR (1969) all NLR 247…..
Etiosa
Local Government v. Jegede (2007) NWLR (pt. 1045) 537……..
Exclusive
store Ltd v. Edo Board of internal Revenue (2005) all FWLR (pt249) 1827 C.A.
Knight,
Frank and Ruthley v. A.G Lagos State (1998) 7NWLR (pt. 556).
Manufacturers
Association of Nigeria v. A.G Lagos state (2004) All FWLR(pt 249)o1327
H.C
Mahtew
v. Chicory Marketing Board (1938) 60 CLR 263…
Mobile
producing (Nig.) limited v. Tai local government council 2 ors (2004)10 NCLR
99…
R.
v. Berger (1908) 6CLR 41…
S.
A v. Regional Tax Board (1970) ANLR …
United
State V. Butler (1938) 60 CLR 263…
TABLE OF STATUTES
Capital
gain tax act, 1990…………………………………..
Companies
income tax act, 1990…………………………..
Constitution
of federal republic of Nigeria …………………………..
Federal
inland revenue service (establishment act no. 13 of 2007)….
Income
tax management act, 1961………………………………………
Personal
income tax act, 1990…………………………………………….
Petroleum
income tax act, 1990………………………………………….
Stamp
duty act, 1990……………………………………………………….
Tax
and levies (approved list for collection) act cap T2 LFN 2004………
Value
added tax act,1993……………………………………………….
TABLE OF ABBREVIATIONS
CAC - Corporate Affairs Commissions
CFRN
- Constitution Of The Federal Republic Of Nigeria
CITA
- Company
Income Tax Act
Citn
- Chartered
Institute Of Nigeria
EBSU
- Ebonyi
State University
FIRS
- Federal Inland Revenue Service
ICT - Information Communication Technology
IT -
Information Technology
LFN
- Laws Of The Federation Of Nigeria
NWLR
- Nigeria Weekly Law Report
SBIR
- State Board Of Internal Revenue
PC
- Personal Computer
PITA
- Personal
Income Tax Act.
CHAPTER FOUR
INFORMATION TECHNOLOGY AND TAXING SYSTEM
4.1 meaning of information communication
technology,
Information communication
technologies is an umbrella term that includes any communication devices or
application, encompassing; radio, television cellular phone, computer and
network hardware and software, statellite systems and so on, as well as the
various services and applications associated with them, such as video conferencing
and distance learning.[1]
The phrase was coined by Television in
his 1997 report to the UK government and promoted by the new national
curriculum document for the UK in 2000[2] Information communication technology is a
diverse set of technological tools and resource used to communicate, and to
create, disseminate, store, and manage information.[3]
These technology include computers, the internet, broadcast technologies and
telephones.
In the past the few decades,
information and communication technologies have provided society with a vast
array of new communication capabilities. For example, people can communicate in
“real time” with others in different countries using technologies such as
instant messaging, voice over IP and video conferencing. Modern information
communication technologies have created a
*************************
Tenuous.
“On the interest, nobody knows you are a dog”.12 without accurate
identification of taxpayers, it is difficult to levy taxes. Even if you can
identify the taxpayer, but not it’s physical location in the world, this will
give rise to jurisdictional disputes. To the issue of identification in the
challenges facing information communication technology toward improve taxation
system is the inability of tax authorities to collect information. In the
conventional commercial environment, taxpayers keeps books and records and
provide information to tax authority to support the assessment of tax. Where
the authorities have the need to verify information provided by the taxpayer, the
can rely upon third party information from financial institution or other
intermediaries. In the electronic environment, electronic book and records may
be more easily stored in a foreign jurisdiction. Encryption used quite
legitimately to protect commercial secrets, may also be used to deny tax
authorities access to records.
Moreso, a major challenge facing the
use of information communication technology towards an improve taxing system,
is the fact that in most developing countries there is no stable power supply,
and of the technol0ogy instrument needs power to maximize it’s result. For
instance a country like Nigeria where
there is constant power failure., this can lead to system breakdown, which
12New York
Times” where two dogs are seen sitting in front of a computer”(July 5th
1993) pg. 10
Will
in turn affect the effectiveness of the input of information communication
technology to taxation. Country, where large amount of the population are
uneducated on how to use I.C.T., it becomes a problem, as the person who does
not know how to operate it cannot use it to pay his or her tax as the case
maybe, and this is also peculiar with the tax administrators itself, as most of
the staff are uneducated and cannot use I.C.T.
CHAPTER FIVE
CONCLUSION
5.1 Observation
Based on a detailed and analytical
study, the following observations were made.
1. There is a structural defect in the law
governing taxation in Nigeria. for instances this can be seen in the
multiplicity of taxation.
2. That I.C.T offers government
significant new opportunities to improve taxpayer’s service; and that those
opportunities should be pursued.
3. That a very large parts of tax revenue
are collected by intermediaries. For example, employers are responsible for the
collection of wage tax; businesses for consumption taxes; financial
institutions for taxes on interest and royalties.
4. That I.C.T opens up new ways for tax
authorities to undertake the business of administering tax laws and collecting
tax revenues and new ways to interact with a wider community. For example,
communication between tax authorities and taxpayers can be revolutionized and
access to information can be enhanced to help taxpayers in complying with their
tax obligation; registration and filling requirements can be simplified, easier
quicker and more secured ways of paying taxes and of obtaining tax refunds will
be facilitated.
5. That there is a now challenge facing
tax administrators, as to what legislation to adopt, procedures and practices
to overcome any deficiencies which emerge as a result of new means of
communication (I.C.T)
6. That is Nigeria, tax authorities face
the challenge of a wide spread tax evasion.
7. That the current tax reform in Nigeria
is gradually impacting positively on the psyche of Nigerians. However, a lot
still needs to be done by the governments to facilitate the realization of the
objectives of the reform.
8. That effective taxing system through
use of I.C.T is the appropriate antidote for the current global economic
downturn in Nigeria.
9. Our analysis has shown that there are
administrative lags ant lapses in the administration of taxes in Nigeria.
10. Finally, the research once again confirms
the low quality of the tax information system, which always hinders a
comprehensive and objective appraised of the performances of the Nigeria tax
information system, which always hinders a comprehensive and objective
appraised of the performances of the Nigeria tax system.
5.2 Recommendation
This study no doubt revealed the
inadequacy and inconsistency of the existing tax system in Nigeria.
Institutionalizing reforms in the Nigeria taxing system in long overdue. The
potential of ICT in taxation is vast and its ability to promote a truly global
village is unparalleled. It is my view at this point that if the following
steps are taken, it will aid the
Nigerian taxing system in brining its best potentials.
(a) The revenue authorities should be made
autonomous and funded from retained taxes, which It collects. This will make
them more responsible.
(b) There should be improved motivational
incentives to be given to tax officials to boost their morals and spur them
into better effectiveness’.
(c) the three tiers of government should
limit themselves to the taxing powers as enshrined in the 1999 constitution of
the Federal Republic of Nigeria (s amended). And that the Taxes and Levies
(Approved List for collection0 should be interpreted subject to the
constitution.
(d) Tax officials should go for training and
seminars on modern taxing techniques in administration.
It is proposed that information
technology and its advantage be embraced in totality by the government
especially with respect to tax administration. The recent spread of the
phenomenon of e-government has proved that tax evasion is becoming increasingly
difficult to perpetrate, where the majority of the government affairs are
conducted electronically. The rise in the ingenuity with which tax evasion is
carried out in Nigeria can be attributed to the fact that taxpayers are still
required to remit their taxes through paper and biro methods, it is easier to
hide under such an abundance of paper work as opposed to an online system where
each tax payer has an account. More so, the introduction of tax consultant will
show that professionals are better at handling matter of tax administration
than the regular government tax officials. This is evidenced by the level of
income they will generate in the short period; if they were employed by the
government as opposed to the low yield that had always ensured from the tax
officials. As such it would be of immense benefit for this tax consultant to
train our officials through seminars, symposia and allied conferences to give a
professional edge to the work of the tax officials.
One of the cardinal aims is to
provide social or public infrastructure or amenities to people for this reason,
government in time past have fallen short of the responsibilities. This has
obviously made the populace loose faith in government, and hence a disinterest
in paying taxes to the same government, which does not carter for their needs,.
It is opined that an increase in the continuous supply of amenities such as
health care, water, roads, education, e.t.c. will serve to encourage the
citizenry and render their passion to support government through payment of
taxes.
The legislative aim of government at
all levels also has a part to play in soling the problems to taxation in our
nation. Government must therefore make sure that it keeping up to date with the
ever- changing realities of the 21st century, it is responsive to
changes in the society. In other words, our taxing system and indeed statutes
should be more flexible to reflect advancement along the rest of the world.
Similarly, there should be a
functioning system for tax administrators e.g (FIRS). The functioning system
should ensure its financial independence, and empower it to deliver on its
expended responsibilities. The tax administrators should publish its annual
audited accounts, which should encourage transparency and accountability. It is
hope here that the minister of fiancé, will in exerting his/her statutory
powers of determining how the accounts of the various taxing board be run,
should be guided by global best practices.
5.3 Conclusion’
Tax collection, which is very necessary
for the generation of revenue, has origin from history itself. It is
undoubtedly that no holistic appraisal can be sufficient in taxation till
kingdom come, due to the dynamic nature of the society.
However; taxing system and the new
trend called I,.C.T have increasingly becoming inseparable as commercials
activities grows and expand both in scope of operations and practicability.
Given the amount of data needed to analyzed in order to access and compute tax
liabilities, it has become imperative that both tax institution and companies,
employ appropriate computer programs in-order to facilitate tax planning and
administration duties. A number of problems have besieged the tax system in
Nigeria and have clogged it from operating effectively. The administration of h
system is reported to be 99% infective. Summarily, the problems of the Nigeria
taxing system can be ascribe mainly to its administration due to insufficient
manpower or staffing, inadequacy funding and lack of infrastructure to aid
smooth collection of taxes. Other problematic issues include corruption in the
public or civil service, ignorance on the part of the population of taxation as
a concept and it’s benefit as well as the issue of the sluggish nature of the
legislative arm of government at all levels to respond to pressing changes. The
methods of tax collection in Nigeria are still very crude. The tax collection
system is far from being organized for instance there has been issues of who
has the power to impose tax in a particular area. In the case of Eti-osa local
Government v. Jegede the court of appeal held thus;
The Eti-osa Local Government has the
legislative power of their own to impose or determine taxes and levies outside
the enabling law which is of general application and which was promulgated to
check indiscriminate levels and taxes… any attempts to cut outside the ambit of
part III of the taxes and levies (Approved list for collection) Decree N021 of 1998
will be futile. I therefore hold that the respondent (Appellant in this case )
has no power to legislate and demand whatever taxes and levies it deems outside
the provisions of the taxies and levies (Approved list of collection ) Decree
no 21 of 1998.
Summarily, taxation, which has been
analyzed as a mandatory system of contributing funds to the government to ease
its capital and current expenditures will strive better when information
communication is used, and the taxpayer will pay its tax promptly because the
accountability of the system is not in doubt. The problem militating against
the ultimate effectiveness and efficiency of tax authorities will be checkmated
if the necessary recommendation made to ease such problems are carried out. It
is hope that the relevant parties involve in taking action will follow this
recommendation. Conclusively, tax administrators need to continuously give
attention to all the changing circumstances and nature of taxation, so that eh
stated corporate goal will be achieved in terms of better productivity.
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