purpose of this study is to examine the effectiveness and efficiency of tax
management in Nigeria. It focuses mainly
on the Federal Board of Inland Revenue and other related parties namely
auditors and corporate tax payers. The project made use of primary data and
secondary data. Primary data was generated through the administration of 65
questionnaires and 50 out of the 65 questionnaires were returned. Secondary
data was collected from journals and records. Responses from the questionnaires
were classified accordingly. Frequency and contingency tables were constructed
and the two hypotheses were tested using chi square statistics. The study reveals that there is relationship between
effective, efficient tax management and tax fraud. The significance of the study is that the
outcome of the research will serve as a useful guideline to tax administrators,
government and also to tax payers, financial analysts, auditors and company
executives who pay taxes.
TABLE OF CONTENT
Table of content v
to the study 1
1.2 Statements of the problems 2
of the study 3
Significance of the study 3
1.5 Research questions 4
1.6 Hypotheses 4
Scope of the study 5
Limitation on the study 5
Definition of terms 6
2.1 History and functions of
Federal Board of Inland Revenue 8
2.2 Constitution of the board 9
Power and duties of FBIR 10
2.4 Federal Inland Revenue Department 11
2.5 Functions of Tax
of taxation in Nigeria 28
Forms Of Tax 29
2.8 Principles of a good tax system 32
2.9 Objective of an efficient tax administration 33
2.10 Problems encountered in the management of tax 33
METHODOLOGY AND DESIGN
3.1 Introduction 35
3.2. Restatement of research questions 36
3.3 Restatement of research hypothesis 37
3.4 The study population 38
technique and size 38
Research instrument 39
Method of data collection 40
of data analysis 41
AND ANALYSIS OF DATA
4.1 Introduction 42
4.2 Analysis of data 42
of hypotheses 63
SUMMARY, CONCLUSION AND
5.1 Introduction 72
5.2 Summary 72
5.3 Conclusion 73
5.4 Recommendations 74
1.2 BACKGROUND TO THE STUDY
x is a compulsory payment made on different bases and rates by citizens
bodies and individual s) to government, non negotiably but obligatorily.
payment is not on the basis of direct exchange for the payment for goods and
services. It is non negotiable because none of the citizens has any direct
contribution to the composition of the bases and rates of payment. Government
only classifies the items on which the tax is t o be paid, and the category of
citizens that should be subjected to the payment (Ariwodola, 2005). The
decision is however, based on the cost of the projects or programmes government
intends to execute, which is the principal determinant of the budget size.
Government also judges the basis, rates, the category of citizens, and the time
period to pay the t ax, on the direction of the economy desired and
government’s perception of t he standard of living of the citizens. This is why
tax is defined as a tool for government revenue and fiscal policy tool for
directing the economy. Taxes are not paid directly on the basis of exchange of
contract like any other payment except subsidies paid ny the government. It is
paid by any citizen whether or not the citizen benefit from the government
projects or programmes financed by the taxes (Rosen 2004).
the usefulness (effectiveness and/or efficiency) of taxes can be measured by
several parameters, some which are its revenue generating capacity and its
impact on the consumption and savings patterns in the economy. Even if the
totality of tax systems cannot be comprehensively measured, the various types
of tax can be subjected to this measurement in Nigeria, there are at least
three types of taxes that are commonly applied to qualifying citizens and
items. These are the personal income tax, the company income tax, and the value
added tax. The assessment of these forms of tax independently or otherwise
becomes more necessary given the multiplicity of taxes in Nigeria, together
with the problems of tax evasion and avoidance. It is against this background
that this study is initiated.
1.2 STATEMENT OF THE PROBLEMS
1. Many people are not aware of the
existence and importance of the FIRS in Nigeria. The research work intends to
identify the various taxes being managed by the FIRS and to see how the body is
able to accomplish its objectives through emphasis on human resources
development, staff motivations, professionalism, dedication and loyalty,
accountability and transparency, excellent human relations, information and
klike “what type of tax do we adopt and what purpose”, “what benefit are we to expect from it” the identification
of this problem will help to recognize causes, understand how the situation has
come about and what the tax authority should do for deciding alternative course
1.3 PURPOSE OF THE STUDY
The primary purpose of this study is
to examine the effectiveness and efficiency of tax management in Nigeria.Other
purposes however includes the following:
appraise the problems, achievement and the impact of tax revenue yield for an
individual and the government.
identify problems experienced which has led to low revenue from tax
identify ways to these problems and
identify new polices and strategies adopted by the government which lead to
increased revenue generation through taxes.
1.4 SIGNIFICANCE OF THE STUDY
1. The significance of the study is
that the outcome of the research will serve as a useful guideline to tax
administrators and the government.
2. The research work will also be of
immense benefit to tax payers, financial analysts, auditors and company
executives who pay taxes.
research also tends to identify problems experiences by tax payers which have
led to low revenue from tax and provide possible solutions through polices and
strategies that will be adopted by the government in order to increase revene
generation through taxes.
1.5 RESEARCH QUESTIONS
following research questions will guide the study:
is the system in use for the collection of tax revenue by tax revenue
there any form of receipt issued to the tax payer after payment
adequate records and books kept for the purpose of tax computation?
tax fraud be committed by the officer or the board in collusion with tax payer?
there need for enlightenment programme to be embarked upon by the revenue
authorities to make tax payers aware of their duties to pay regularly and
The following hypotheses are tested in the course of the
H0: There is no significant relationship between
filling of tax reforms, payment of tax and effectiveness, efficiency of tax
H1: There is significant relationship between
filling of tax returns, payment of tax and effectiveness, efficiency of tax
H0: There is no significant relationship between
effective, efficient tax management and tax fraud
is significant relationship between effective, efficient tax management and tax
1.7 SCOPE OF THE STUDY
scope of this reaseach work covers the effectiveness and efficiency of tax
mananement in Nigeruia. It also cover the administration and tax management
system in Nigeria. For the purpose of this study, federal board of inland
revenue is used for the generalization of this study.
1.8 LIMITATION ON THE STUDY
The limitations on the study include the following:
Revenue officers were reluctant to give needed
information when spoken to; some even remain anonymous complaining that the
research work and research topic is a sensitive issue.
Income earners and tax payers were
reluctant a giving information as some of them suspected us to be agent to the
government. Hence attitude of these respondents to some extent affected the
information collection procedure.
Restriction on the subject matter tax
management in Nigeria an area with title and in adequate literature in the form
of textbooks and articles.
data statistical compilation in the country is nothing to write home about.
1.9 DEFINITION OF TERMS
the write up are some terms used which are known to only the economist students
therefore, there is need to explain such terms which include the following:
tax is a compulsory levy on economic and commodities by the government of a
particular country through its authorized agencies for the purpose of earning
revenue, which shall be used to meet commitment towards satisfying the
means that all the citizens of the country are bound to pay tax imposed on them
by the state.
to individual is benefits within an accounting period e.g. wages, rents and so
on which taxes are levied by the government of that state where those
revenue can be defined as the amount of money raised by a state from various
sources in order to enable it carry out the various functions it is called for.
fee like a tax is a compulsory contribution but unlike tax, it is charged for a
specific service. There are different types like court fees, entrance fees.
When someone pays a fee he gets service in return.
refers to the resultant responses and changes in the economy after imposition
on collection of a particular tax.