PROBLEMS OF ASSESSMENT AND COLLECTION OF PERSONAL INCOME TAX IN NIGERIA A CASE STUDY OF BOARD OF INTERNAL REVENUE DELTA STATE ABSTRACT
Collection and assessment of personal income tax has been
bedeviled with problems. These problems made the researcher to investigate if
there were problems existing and if so, what are the consequences to the state.
As a result, some related literature was reviewed; some vital data were also
collected from primary and secondary sources. The major findings of the study
was that the personal income payer who measured their profit do not follow
acceptable format from profit and loss account measurement e.g. cash and stock withdrawn
from business are not properly recorded. Absence of proper assessment have no
noticeable impact on tax payers in the management of their business, most of
the tax payers do not keep proper books of account of their business. More
incentive such as promotions and rebates should be given to tax officials on
the tax collected.
TABLE OF CONTENT
Title page –
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– – i
Approval page
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– ii
Dedication – –
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iii
Acknowledgement
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– iv
Abstract – –
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– v
Table of content
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– vi
CHAPTER ONE
Introduction – –
– – –
– – 1
Background of the study
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– – 1
Statement of the problem
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– – 5
Objective of the study
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– – 6
Significance of the study –
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– 8
Scope of the study –
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– 9
Limitations of the
study- – –
– 9
Definition of term-
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– 10
CHAPTER TWO
literature review
– – –
– – –
15
2.1 Concept and
meaning of taxation — –
15
2.2 Classification of
taxes – –
– – –
18
2.3 Concept of
personal income tax – –
– 20
2.4 Administration of
tax in Nigeria – –
– 23
2.5 Assessment of tax
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– –
25
2.6 Effect of tax Assessment
– – –
– – 26
2.7 Problems
assessment and collection of personal income tax –
– 33
CHAPTER THREE
Research Design and Methodology – –
– 41
Introduction – –
– – –
– – 41
Research Design –
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41
Sources of Data
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43
Data collection instrument –
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44
Population of the study
– – –
– – 44
Sample size determination
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– 45
Validity and reliability
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– – 46
Method of data analysis
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– – 47
CHAPTER FOUR
Presentation and analysis of Data – –
– 49
Introduction – –
– – –
– – 49
4.2 Data presentation
and analysis – –
– 49
4.3 interpretation of
data – –
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72
CHAPTER FIVE
Summary of findings, conclusion and recommendation –
– – 75
Summary of findings –
– – –
– – 75
Conclusion
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76
Recommendation
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78
Bibliography
Appendix
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF
STUDY
Government of a State needs money to secure its tertiary and
to provide social services such as maintenance of law and order, security,
lives and properly of its citizens. This is becomes compulsory that every
subject of a State must given financial support to the Government as nearly as
possible in proportion to their income. That is, in proportion to the revenue
which they respectively enjoy under the
protection of the state (Smith, 1904:310).
Therefore, tax is
a compulsory levy imposed by Government against the income, profit, or wealth,
of the individual partnership and corporate organizations
Tabanisis Ochigu
(1994:1) stated that “in Nigeria tax is levied on the authority of the Federal
Government, income tax Government Act 1961 (FAMA) and subsequently amendments
including the finance (Miscellaneous Taxation Provisions) Decree 1992 and the
(Finance Miscellaneous provision) Decree 1993.
These laws are not
static as they are changed almost each year during the budget speech. The
direction is determined by what the Government wants to achieve.
However, the yield from personal income Tax (PIT) has been
less than the expect or budget. This poor yield has found to be as a result of
personal income tax. This has adversely affected the yearly income of
Government, since taxation is one of the major source of Government revenue
Personal income tax
was introduced in 1799, as a means of paying for the war against the French
forces under napoleon. The cost of persecuting the war had drained Britains resources
and run up a considerable national debt. The army was starving, and poor
conditions in the Navy in 1797 had led to muting so tax was introduced as an
“aid and contribution for the prosecution of the war”. Taxation had to continue
amidst protests from people. Even lady Goliva Roda naked through the streets of
currently in the century to persuade her husband to reduce it.
In the year 1979 where a tax clearance certificate issued to
late Dr.Nnamdi Azikiweb was contested assessment as and when due. The court
ruled that in accordance with the faster region finance low 1958, Azikiwe
objected to the tax and made part payment of up to 50% of amount due
accordingly and waited for his objection to be resolved thereafter and
therefore was deemed to have paid his tax as when due.
In the Northern
Region, such part payment would not have sufficed, because in the personal
income tax 1962 of the North full payment of tax most be made irrespective of
pending objections tax legislation throughout the country.
In Delta State, this
is the case study in one the thirty-six (36) States in Nigeria which is located
in South- South region. The state capital is Asaba in Aniocha Oshimiri Federal
Constituency. It is made up of twenty- seven (27) local Government Area. Its state
Board of internal Revenue is located at NO. 42 Ezenei Street Asaba the board
comprises of :
Executive Head of State services as chairman, appointed by
the state Governor.
Three other persons nominated by the commissioner for
finance in the state on their personal merits.
The Directors and
Head of Department within the state service.
The Secretary is appointed by the board from within the
state service. The legal adviser is a member of the state board and represents
the board in his professional capacity in any proceeding in which the state
board is a party. The Quorum is five members of which one must be the chairman
of a director.
On the basis of the problem surrounding the and collection
of personal income tax, that this project is based in order to guest for and
finding solution to them.