ABSTRACT
Tax
is any form charge levied on a person or an institution by a governing body or
its equivalent such that defaulted payment is punishable by law. The imposition
of taxes and the institution of taxing is as old as civilization itself cutting
across religion, race and continental borders.
Prompt tax payment and reduced tax
evasion is always a primary objective of the government in most civilizations
that exist today. The issue of tax evasion has proven to be a difficult
practice to curb even in nations with a proper database of its citizenry and
the current mode of tax payment is redundant and hectic as ascertained through a
survey of our case study. Some of the challenges governmental bodies have to
overcome in order to encourage the prompt payment of taxes and effectively
reduce evasion includes, developing convenient payment methods and having
proper records keeping systems. This research work is a concise summary of how
the continuous development of computing science and its wide spread ability to
be deployed to solve a wide range of problems can be geared towards the
development of an electronic taxation system to assist government bodies with
convenient tax collection and record keeping. The waterfall methodology was
selected for system development. Goals to be achieved by the system are instant
access, improved productivity through efficient utilization of resources, database
creation and records management, simplification of operations, reduced
processing time, user friendliness, portability and flexibility for further
enhancement. The E-taxation is not a new system, but a rather local solution to
a problem with global purview. This system looks at how tax payment can be
encouraged through simplification and increased efficiency in payment
processing.
CHAPTER ONE
1.0
INTRODUCTION
According
to a world bank economic report on Nigeria published on the 1st of May 2013, it
was stated that 95% of the government’s budgeted expenditure depended on its
projected oil revenue based on current world oil prices. It was also
recommended in the report that the Federal Government, through the improvement
of the domestic tax system it can increase its internal revenue and provide in
the event of a fall in oil prices a financial backup plan for the economy (The
World Bank, 2013). Tax is a charge imposed by a government on persons, entities
or property, administered to generate revenue for that government (Black,
1999). Tax is a common source of income generation for financing government
activities. Individuals and organizations are expected to fulfill their
obligations on tax payment as required by law to give the government the
financial power, amongst other purposes of taxation. Effective taxation
therefore becomes important as it is a source of required financial power for a
government to rule its territory.
There are two forms of taxation common
to most countries, direct taxes to be paid by the tax payer on his income,
profit or asset owned. The other form, indirect taxes is imposed on commodities
before they get to the consumer, and are to be paid by the consumer not as
taxes but as a part of the selling price per unit of the commodity (Money
Control, 2013).
The Nigerian tax system is surrounded
by countless problems which include: Little data available on the history of
tax revenues or tax payers due to a lack of proper records keeping system
(Federal Republic of Nigeria, 1997). A lack of comprehensive tax statistics and
a centralized database for the existing ones (Federal Republic of Nigeria,
2002). Deployment of limited man power and other necessary resources into
redundant roles and job functions (Ariyo, 1997). Duplication of taxes and its
negative effect on tax payers a problem resulting from a clash in the
governments’ fiscal responsibility and its fiscal power (Odusola, 2002).
Deliberate attempts by tax payers to evade taxes (Odusola, 2003). The aim of
the e-taxation system is to provide the tax authority a database with details
of taxpayers and their transactions. This would reduce the issue of tax evasion
and hence an increase in government tax revenue. It would also allow taxpayers
process their transactions online without having to visit the office of the
FIRS, reducing the workload on the resources available to the FIRS and which
consequently give room for the re-allocation of freed-up resources. The
objectives considered during the development of the e-taxation system include:
Creation and management an effective and efficient database to provide tax
payers records, information/bio-data for easy referencing. The provision of an
alternative payment routes for tax payers so as to encourage immediate tax
payment and provide relief to those who find it an easier and more efficient
payment route. Which will be achieved by creating a web based system in which
registered entities log-in and make payment. The availability of an alert
system that to notify the regulatory body of outstanding payment by registered
entities and workers.
The e-taxation system is to be
developed for use by the tax authority at the federal level for tax payment,
record keeping and educational/awareness programs in under-developed and
developing countries with specific focus on the African continent.
1.1 BACK
GROUND OF THE STUDY:
Governments are as diverse as the
people and cultures they serve. But when it comes to keeping a government
running through efficient assessment and collection of taxes, they all face the
same basic challenges. Whether you’re a county on Florida’s Gold Coast or a
republic in Africa emerging from strife and putting comprehensive tax
procedures in place for the first time, it all comes down to fair and
transparent assessment and valuation of property; efficient, effective billing
and collection procedures; and absolute transparency with your most important
constituents – the public.
Breakdowns at any point in the system
can lead to lower revenue, confusion and perceptions of unfairness. Yet revenue
departments face serious internal pressures, since they are often compelled to
get the most out of aging or outdated software and hardware systems. It’s the
classic chicken-and-egg scenario: You need the best tools in order to get
better at managing and collecting taxes. At the same time, how can you afford
improved technology without the collecting the appropriate revenue?
Most company now uses computerized
payroll system. A computerized payroll system will not only resolve difficult
problem but also it will provide fast process and accurate calculation of the
salary. According to Dave Rooses (2010) in his article on how payroll system
work. In manual payroll system there is so many possible errors that may be
encounter but if the payroll is computerized, payroll clerks will not need
calculator to compute the salary of the employee. Payroll is the sum of all
financial records of salaries for an employee, wages, bonus and deductions. In
accounting, payroll refers to the amount paid to employee for services they
provided during a certain period of time. (Wiki podia 2005). The employer are
required to hold back the part of each employee’s earnings because the money
will used for paying the income taxes union dues and medical insurance premiums
that is responsible of the employee. (Fundamental financial and managerial
accounting concepts published by mc grave-hill international edition).
Payroll processing is actually a
special- case purchases system in which the organization purchases labor rather
than raw materials or finish goods for resale. (Accounting information system
by James A. hall 2006), the proponents will propose a system that is entitled
computerized payroll system. It will save time, produce faster result and will
lessen the errors.
A computerized payroll system will not
only provide accurate calculation and fast process of payroll transaction but
it will secure data through security implementation and accordingly arrange
files provided by a well designed database that will produce a paperless
environment.
Gboko local government education
authority is a government establishment under the supervision of Benue state
universal basic education board (BENUE SUBEB). The LGEA is to carter for the
needs of universal primary education at the local level. The need for the efficient
management of the staff warfare and the and emoluments that are accrue to the
staff from the state government as in the monthly salaries, wages, and other
benefits received from the work done on a monthly basis, the LGEA have a duty
to prepare the payroll of his/her staff to the state headquarters of SUBEB for
approval and document and pay details of individual staff is entered manually
using biro, pencil and duplicating papers for making of duplicate copies.
1.2 STATEMENT
OF THE PROBLEMS
Due to the manual process of collection
of Tax and proper recording of records, the government fails to collect the
appropriate Tax from the people, body, and cooperation also from business firms
that are due for Tax payment. The government cannot access all the location to
collect Tax from them. Also because of inconsistency in the process, the
actually Tax payment might not be calculated effectively from this bodies.
Therefore, making the government loss so much in the revenue generation from
the Tax income service.
1.3 OBJECTIVES
OF THE STUDY
This study is intended to design and
develop a computerized e-tax system, a system that will allow all this bodies
to pay their Tax from their location and pay consistently.
Specifically, other objective of this system is
to develop a system that will provide:
i.
A
registration, payment processing and tax filing facility for individuals and
businesses.
ii.
Provision
for individuals and corporate bodies to request for their Tax Clearance
Certificate (TCC) online.
iii.
A
Customs management system for its import, export and cross border activities.
iv.
Electronic
interfaces with the Gboko LGEA and the Companies and Intellectual Property
Commission (CIPC).
v.
Minimizing
the effort of the book keeper in processing the payroll slip and payroll form.
vi.
Making
an efficient and accurate computation of Tax payment due.
vii.
Creating
a well-arranged database and to implement strong security of the system for
data security.
1.4 SIGNIFICANCE
OF THE STUDY
The proposed system will help the
internal revenue commission board and the LGEA especially for Tax collection
and management. It will help to lessen the time and effort of the board in
moving around and collecting Tax. The system develop can accommodate changing
features and produce a paperless environment through 2well design database.
This study will help the proponents to
enhance the ability on how to create an understandable computerized system in
an easy way. This will serve to the proponents as a challenge to do a better
system.
1.5 SCOPE
AND LIMITATION
1.5.1 Scope
This study is designed to develop and
implement a computerized payroll system which will be called an e-Taxation
system for BIRDS and Gboko LGEA, it cover the process of preparing and
collecting of Tax from employee, cooperation and business firm and management
of this records
1.5.2 LIMITATION
The proposed computerized payroll system for BIRDS and the Gboko LGEA
does not support offline program. It only uses the internet or the wireless
Area network (WAN) for its operation.
Other
limitations are as follows:
i)Lack of fund to sponsor the research and implementation of
the at the initial time.
ii)
Inadequacies of professional programmers who should have been used as reference
point at the design stage through the implementation stages.
1.6 DFINITION
OF TERMS:
-Computer is management and business
study (1978), defined a computer as an electronic device that is capable of
imputing and outputting stored in the computer system.
- Payroll: list of employees and all
their and salaries including their allowance and deductions
-Salary: this is usually a monthly
payment for regular employment that on
his / her work done.
-Shift allowance: This allowance paid
to worker or shift basic.
-Arrivers: this represents the
accumulation of staff entitlement.
-Rent subsidy: these represent the rent
given to an employee for his or rent age.
This is the allowance granted to an
employee who it s a pictorial represent of information in data processing means
of symbols.
-Transport allowance: this is allowance
given to a staff for his transportation to work.
SQL:
structure query language a database payment language.
LAN:
local Area network.
Tax is a financial charge or other levy
imposed upon a taxpayer (an individual or legal entity) by a state or the
functional equivalent of a state to fund various public expenditures. A failure
to pay, or evasion of or resistance to taxation, is usually punishable by law.
Taxes consist of direct or indirect taxes and may be paid in money or as its
labour equivalent. Some countries impose almost no taxation at all, or a very
low tax rate for a certain area of taxation