3.3 Sample size
3.5 Sources of
3.6 Method of
and validity of research instrument
Data presentation and analysis
4.3 Test of
Summary of findings, conclusion and recommendations
5.1 Summary of
1.1 BACKGROUND OF THE STUDY
Every Society in whatever
form will comprise the ruling and the authority and the ruled subjects. As
social contract term the ruler is expected to perform some roles; be it
administrative, social, economic, political, cultural or religious. In return,
the ruled subjects that enjoy the benefits from these roles performed are to
give something for keeping the machinery working. This could be in cash or in
kind. 'In light of the above, every constituted human society, whether
primitive or modem, has one form of levy or the other. This necessitates tax
and taxation. A historical review of man and society reveals that tax exists as
a major source of revenue for government.
according to Nightingale (1998), "is the part of the price to be paid for
living in an organized and orderly society, for if this is not done, the
miscreants produced through the inequality in the system will be a source of
constant irritation to the well-being of those who have." A system of tax-
will vary (even if slightly) from one 'country to the other because it is a
sociopolitical and economic' model representing society's social, political
and economic needs and aspiration at arty given time. Because of this, Nigerian
tax system is dynamic and is continually changing to meet the needs of the
constituents of the society.
An income tax is a
tax levied on the income of individuals or business (corporations or other
legal entities). Various income tax systems exist, with varying degrees of tax
incidence. Income taxation can be progressive, proportional, or regressive, when
the tax is levied on the income of companies, it
is often called a corporate tax, income tax, or profit tax. Individual income
taxes often tax the total income of the individual (with some deductions
permitted), while corporate income taxes often tax net income (the difference
between gross receipts, expenses, and additional write-offs). Various systems
'define income differently, and often allow notional reductions of income (such
as a reduction based on number of children supported).
According to Lekan
and Sunday (2006) "Personal Income Tax is a tax imposed with income as its
base." This income is as received by some chargeable people. Agbetunde
(2004) states that "It is not everybody that falls under the coverage of
this tax but certain sets of people called taxable persons." The
discussion on the administration of income tax is incomplete without due
consideration of the socio-economic development of Ikeja Local Government Area
of Lagos State.
In light of the
above, the revenue generated through taxation in Ikeja Local Government of the
state has been channeled to various areas such as road construction and
rehabilitation, transportation, traffic management, environmental
beautification, waste management, flood control, physical planning and flood
upgrading, education, job creation, health, economic planning, commerce and
industry, housing, etc. most feasible in Mobolaji Bank Anthony Way, Obafemi
Awolowo Road, Oba Akran Road, Airport –Road etc,
impact of personal income tax administration in Ikeja cannot be
over-emphasized. It is seen in the system of transportation in that, roads have enormous impact on the
standard of living of the people in so many ways. It is also noticeable in the
environment to general, because of the determination to have a sustainable environment and this has
prompted an aggressive promotion of a culture of 'Greening Ikeja Local
The success 9f
this landscaping and beautification exercise is self-evident in many outer and
inner areas and major roads as stated earlier.
In the course of
this study, effort shall be made to discuss extensively on the economic
importance of personal income tax administration in Lagos State, and Ikeja
Local Government in particular.
1.2 STATEMENT OF THE PROBLEM
The following are
the problems that prompted the pursuit of this study:
Low level of
awareness of the method of operating personal income tax system by tax payers
in Ikeja Local Government of Lagos State.
High level of tax
avoidance and tax evasion among traders in Ikeja Local Government.
Slow rate of
socio-economic development In Ikeja
qualified and competent tax inspectors, tax collectors and tax consultants in
e. Indiscriminate imposition,
assessment and collection of taxes by officials of tax authorities in Lagos
1.3 OBJECTIVES OF THE STUDY
Relevant to the
study is the definition of the general objectives of this study, which is the
evaluation of personal income tax administration and the socio- economic
development of Ikeja Local Government' Area in Lagos State. The objectives are
To discuss the evolution and development of tax in
Nigeria before, during and after colonial era.
To evaluate the reasons for the high level of tax
avoidance and tax evasion among traders in Ikeja Local Government.
To identify the various sectors of the economy of Ikeja Local,
Government that requires rapid development. '
To discover certain challenges facing effective personal
income tax administration in Lagos State such as unqualified and incompetent
tax officials, indiscriminate imposition, assessment and collection of taxes,
To find out why the rate of socio-economic development in
Ikeja Local Government of Lagos State is low.
1.4 RESEARCH QUESTIONS
questions are as follows:
How does tax reflects the socio-economic needs of people
in the society?
How effective is the implementation of personal income
tax by Lagos State Government?
What is the compliance level by residents, firms and
traders in Ikeja Local Government Area in terms of payment of taxes?
To what extent has personal income tax been applied in
the provision of infrastructures in Ikeja Local Government Area?
1.5 RESEARCH HYPOTHESES
hypotheses are formulated in this study:
Ho: Personal income tax administration
cannot facilitate socio-economic development of Ikeja Local Government Area.
H1: Personal income
tax administration can facilitate socio-economic development of Ikeja Local
Ho: Low awareness and compliance level of
personal income tax system' by most people in Ikeja Local Government Area is
not a major reason for low tax revenue to the government.
H2: Low awareness and compliance level of personal income tax system by
most people in Ikeja Local Government Area is a major reason for low tax
revenue to the government.
OF THE STUDY
This study intends
to indicate its meanings and values to the following groups:
Tax authorities In Lagos
State and Ikeja Local. Government in particular will realize the need for
improvement in the system of administrating of personal income tax, the need to
recruit qualified personnel and devise effective method of imposing, assessing
and collecting taxes from tax payers.
The tax payers should be better enlightened about the
essence of taxation in terms of its economic, social and cultural implications
in a civilized society.
1.7 SCOPE AND
LIMITATION OF THE STUDY
The areas to be
covered in the course of this study are: tax and taxation, personal income tax
administration, the evolution and development of tax in Nigeria
“characteristics of a good tax system, tax administration and the
socio-economic development of Ikeja, problems facing tax authorities in
ensuring an effective tax system in Lagos State, etc.
or limitations of this study are stated as follows:
Inadequate information required for the study write-up.
Poor attitude of respondents to research instruments.
Insufficient funds for clerical and other related costs.
research work will achieve its major objectives.
1.8 PLAN OF THE STUDY
This research work
has been arranged chronologically into five chapters as follows:
Chapter one provides
a background the study, It "gets out the major problems prompting the
research work. It clearly states the objectives of the study, the research
questions for which answers must be provided, the research hypotheses that will
be tested later (in chapter four), the relevance or significance of the study
to both tax authorities and tax payers, the scope and limitations of the study,
the study plan (which gives a total framework or arrangement of all the
activities involved the study), the definition of key terms, and an historical
background of the case study (Ikeja Local Government Area).
concerns detailed discussion and explanation of relevant areas of the subject
matter in a theoretical and conceptual manner, making references to related
work carried out by some authors of textbooks, journals, seminar papers, etc.
Chapter three is
the description of the methods adopted in conducting the study. It
considers" the research design employed, the study population, sample size
and technique, the sources of data, the validity and reliability of research
instrument adopted, and the method of data analysis.
involves the presentation and application of method of data analysis stated in
chapter three. It also involves the testing of the stated hypotheses
(hypotheses I and II) and making decisions 'based on the results of the