Computation of Chargeable Tax Under Nigerian Companies Income Tax
CHAPTER ONE
RESEARCH OBJECTIVES
- To ascertain whether sharp practices in administration between the staff of FBIR and assess company contributed to tax evasion
- To ascertain if there is any variation between financial statement used for AGM and that sent to FBIR for tax administration
- To ascertain whether loss of confidence in government officials has contributed to tax
CHAPTER TWO
LITERETURE REVIEW
OVERVIEW OF THE NIGERIAN TAX SYSTEM
In Nigeria taxation has been existing even before the amalgamation in 1914 of the North and South provinces to form the territory now called Nigeria. The types of taxes paid in those days are in form of homage paid to Oba’s, household contribution for maintenance of peace and maintenance of soldiers, penalty paid for non-performance of civil right and contribution to educational development.
The earliest trace of taxation was believed to have started from Northern Nigeria and this was before the advent of British administration. The emirs had organized forms of administration and their Islamic Relation made it possible for people to contribute toward charity which laid a sound foundation for direct taxation in Northern Nigeria. Prior in 1900,some of the levies were “Zakkat (a tax on moral property meant for charity),Jangali (tax on livestock),Gado (death tax),Jizjah (tax on slaves) etc these were recognized in the Northern Nigeria, Onwubiko(1998). There were also some form of taxes in Southern Nigeria (Yoruba parts) by way of tributes (isalcole), totls, levies, feas and presents given to Obas (Kings), Chief in Benin, Oyo and some other Yoruba Kingdom of Western Nigeria. However in the east this type of tax paying tradition was virtually non-existing but except fine called “Iri-iwu”due, mainly to lack of organised central authority which the eastern Nigerians are known for their Egalitarian society. These forms of taxation comes to a halt with the advent of colonial master’s. The Oba’s and emirs now used in imposing taxation on their subjects and anymore found guilty was punished Onwubiko (1998).
With the advent of the British, the administration and collection of tax were made with the enactment of several ordinances. Direct income assessment was introduced by the Lord Lugard, the British high commissioner through the community tax ordinances 1904 in the then Northern Nigeria. He also passed another law “the nature revenue proclamation law at 1906”. This law aimed at verifying all forms of taxation in Northern Nigeria. He also made changes which aculiminated in the nature revenue ordinate of 1917.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
Research methodology is the specification of procedure of collecting and analyzing the data necessary to solve the problems at hand.
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The purpose of this chapter is to provide data which should be adopted in order to attain the objective of the study.
These are contained in the following such as, research design, area of study, scope of the study, population of the study, sample and sampling technique, data collection procedure, instrument validity and reliability, administration and data analysis procedure.
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND DISCUSSION
This chapter covers the presentation, analysis and interpretation of data gathered through the various methods described in chapter three (3) this stage of the study gives better shape and meaning to the data used. The test of hypothesis will be done in this chapter.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS.
5.1 SUMMARY
The study highlighted the company income tax in Nigeria and also concluded the various decrees that amended the act particularly 1979 Act.
The Federal board of inland Revenue (FBIR) deals with all revenue matters relating to direct taxes e.g. company income tax.
From the investigations carried out the researcher found out the following which include;
Sharp practices in tax administration between the staff of FBIR and assess company contributes to tax evasion.
There is no variation between the financial statement used for AGM and that used for tax administration of assess company.
The loss of confidence in government contributes to tax evasion.
Company income tax administration:- the federal Board of inland revenue like other civil service arm is settled civil service bureaucracy. This has affected the responses attitude to work and indirectly encourage tax evasion and avoidance.
Lack of tranined personnel or inadequacy of trained personnel’s; it was found out that great percentage of the staff were not given the opportunity to undergo on proper training with regard to growing technological
strides. Therefore, it is difficult for such personnel’s to assess companies for tax.
It was discovered also from the findings that the reason behind the attitude of tax officials to work and certain fraudulent practices is due to the fact that they are not well motivated.
5.2 CONCLUSION
The problems of company income tax collection already highlighted were the problems facing the federal board of Inland Revenue.
The researcher took time to check all about company income tax administration problems and prospects for the accomplishment of the objectives of the study e.g. reviews of related literature has been carried out to a reasonable level. Data gathered, collected and analysed. The results were used to test the three hypothesis which determine either to accept or reject the hypothesis.
This revealed some of the problems hindering the effective performance of the board which are civil service bureaucracy, Lack of working equipment’s and infrastructure, inadequate relevant training and incentives for tax officials and ineffective management strategies and practices etc
Recommendations where made which where the solutions proffered by the researcher to check the problems of the company income tax collection administration.
As pointed out above the government has to take definitive measures to improve the collection machineries.
5.3 RECOMMENDATIONS
Based on the research carried out on the company income tax administration in Nigeria with particular reference to Abia state, the following recommendations are made to improve tax revenue generation of the government if properly implemented.
There should be proper staff training programme yearly. This will increase and effectively and efficiently on the job profession also such as economist, accountants, Lawyers etc should be in greater percentage in the composition of the Federal Board of inland Revenue and its duties effectively and efficiently.
The Federal Board of Inland Revenue should be made autonomous in the implementation of tax policies. The board should be directly under the presidency. It should be responsible in determine personnel welfare package, promotion and tanning of the staff.
Tax laws:- Tax laws should be clear and not ambiguous. The language of tax laws should be clear, understanding and be made completely enforceable by law enforcement agencies. The laws should be incorporated in the criminal laws ie there should be provision under the criminal laws of Nigeria
Human resource development: Motivation is a necessary management tool to achieve efficiency in employee. Enough and good motivational tools should be made available to the workers such as promotion of workers when due, timely payment of gratuity at the retirement of a staff.
Provision of infrastructural facilities:- There should be provision of enough and adequate infrastructural facilities to create staff efficiency. Facilities as modern communication gadgets vehicles for transport and other necessary equipment should be put in place to enable the boards staff to discharge its duties effectively and efficiently
An efficient and effective management information system (MIS) should be put in place and right administered in the entire tax system.
The information agencies should carry out investigations to ensure the information supplies by tax payers or corporate bodies are complete. This can be done by asking for further returns from the payers. The further returns must include an audited account of the period in questions, in a case of corporate bodies.
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