Abstract
This study was set to determine the impact of good tax
management on revenue generation in Anambra State, using Orumba south Local
Government Area as the area of study. The study was necessitated by the
increasing financial burden on the government at levels occasioned by the
surging need to provide social services and infrastructural development for the
governed. To accomplish the objective of the study, the researcher has reviewed
the opinions of established authorities on the subject matter of study. Well-
structured questionnaires were used to elicit information from respondents
forming the sample of study. Data were
collected using questionnaire and were analyzed using frequency tables and
percentages.
The analysis result revealed that;
The tax system is designed and formulated to facilitate
generation of revenue.
The tax system is planned to prevent evasion and avoidance
of tax by citizens.
In spite of the high demand for social services and
infrastructural development, tax payers still avoid tax.
Tax management in Orumba south L.G.A is effective and has
resulted to increased generation of tax revenue.
On the basis of the above findings, the researcher
recommends that;
The citizens should be sensitized on the need to pay their
taxes as a civic responsibility.
Tax personnel should be persons of proven character
Government should ensure stricter enforcement of existing
tax laws to ensure compliance.
TABLE OF CONTENTS
Title page
Approval page
ii
Dedication
iii
Acknowledgement
iv
Abstract
v
Table of contents
vi-vii
CHAPTER ONE
Background of the study 1
Statement of the problem 6
Objectives of the study 7
Research Questions 8
Significance of the study
9
Scope of the study 10
Limitation of the study 10
Definition of terms 11
References
13
CHAPTER TWO β LITERATURE REVIEW
2.1 History of Orumba South L.G.A 14
2.2 Meaning and definition of Taxation 15
References
31
CHAPTER THREE- RESEARCH METHODOLOGY
3.1 Introduction
32
3.2 Research
Design
32
3.3 Sources/method of
data collection 33
3.4 Population and
sample size
33
3.5 Sampling techniques 34
3.6 Method of data analysis 35
References
36
CHAPTER FOUR β PRESENTATION AND ANALYSIS OF DATA
4.1 Introduction
37
4.2 Presentation of
data
37
4.3. Analysis of data
37
CHAPTER FIVE β SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary of finding 50
5.2 Conclusion
51
5.3 Recommendation 52
5.4 Area of study
53
BIBLIOGRAPHY 54
APPENDIX
56
QUESTIONNAIRE
57
CHAPTER ONE
BACKGROUND OF THE STUDY
The prime objective of every government is to maintain law
and order, to provide and maintain basic essential services without which the
community will be unimaginable and which by their nature cannot be left
appropriately in the hands of private entrepreneurs. Such services include
Internal Law and Order, Maintenance of National defense, provision of good
healthcare system, educational system, transportation system, agricultural
system etc. To cover the cost of providing these goods and services for the
public good, government must generate financial and adequate revenues. The
quest to governing meaningful financial resources has often led government to
designing and administering some efficient and effective revenue generation
systems. Primarily the main source of government revenue includes;
Taxation
Borrowing
Charges
Grants.
Amongst these sources, taxation (the demand made by the
government of a country for a compulsory payment of money by the citizens of
that country.) remains the most outstanding. This may be due to it being a
civic responsibility that must be performed by the citizens of the state. As a
non-penal by compulsory transfer of resources from the private sector, taxation
must be levied on the basis of equity, certainty, convenience, economy and
productivity. Unfortunately, taxes are not paid in exchange for specific things
but are collected for the sake of public welfare and interest.
Historically, without
exaggeration, the origin of taxation is as old as mankind. The Christian bible
tells us the story of Joseph in Egypt and his seven years plan. The Egyptians
were heavily taxed for seven years to enable them build up a surplus of grains
for storage against the year of famine. This is one of the early instances of
economic planning through taxation. In Nigeria, the legal history of tax system
can be traced to the native customs and traditions. Nigerians cheerfully paid
taxes in kind (rendering free services to communities in which they lived).
Those who could not render these services were duly punished. These people were
forced to erect community buildings or have their fat animals slaughtered for
the benefit of the community.
Studies have
shown that before the advent of colonial rule in Nigeria, some relatively well-
organized system of taxation had existed In the north under the autocratic rule
of Fulani conquerors. The Mohammedans by enjoining their followers to give a
portion of their income for charitable or religious purposes provided a
religious basis for taxation in Northern Nigeria. Community taxes were also
levied on communities. Akin to this were special taxes often levied by
reference to occupation or on products or services produced or rendered. For
instance, fishermen, smiths, hunters, weavers, etc were all subjected to pay
special taxes.
Government
often uses various systems (kinds) of taxations to generate the required
revenues. For instance, direct taxes which include personal income tax, often
applied on employees, sole traders, partnership, capital gain tax on companies,
individual and non- co-operate entities, capital transfer tax (applicable asset
transferred from one person to another), purchase tax, petroleum profit tax,
and company income tax has constituted a significant source of revenue to the
government. Similarly, indirect tax, e.g. stamp duties, custom duties,
industrial training fund, toll paid on federal highways, will have often
enhanced government revenues.
The administration of tax in Nigeria is in the hands of
three relevant tax authorities viz:
The joint Tax Board
The federal Board of Inland Revenue
The various state Board of Internal Revenue
In Nigeria, persons liable to pay income tax include men,
women, married or single, trustees and executors, families, villages and
indigenous communities. Though government can also raise funds through natural
resources such as oil, palm oil, coal and gas which are exported, those
alternative sources of income to government are hardly enough to shoulder the
burden of government expenditures, especially in the area of economic and
social spheres in each year, hence the need for tax payment.
We must emphasize
here that income Tax Law must be interpreted in strict- to- sensor. There is no
equity in tax law. The tax payer must be brought within the letter of the law
and rigid adherence is the rule. Nothing should be read in and nothing should
be implied. The onus of bringing a tax payer into the tax net is on the revenue
or assessment authority. Another important point to note is that tax is not
imposed on person or individual. Section 4 (1) of ITMA 1961 states that βthe
tax shall subject to the provisions of this act, being payable for each year of
assessment upon income accruing in derived form, brought or received in
Nigeria. Studies have shown that in Nigeria, workers pay more than the rich
people who invest in various proper ties such as building, transporters, etc as
a result of ineffective administration of taxes. Yet those investors are the
category of people who would want government to move mountains in terms of
raising their socio-economic well being, without meaningfully contributing
towards the funds.
Now that our
various government are gearing efforts to revamping over bettered economy and
improving the living condition of Nigerians, the need for the evolvement of
more effective strategies to ensuring regular tax payment by taxable
individuals need not be overemphasized. Taxable adults and organizations in
various sectors of the economy must discharge their civic responsibilities.
Unfortunately, this can only be achieved if tax systems are effectively
administered so that people would in government revenue generation, willingly
and without grudges pay their taxes. This will result to improvement in
government revenue generation, hence the basis for this research study.