EFFECT OF ELECTRONIC TAX SYSTEM ON TAX COMPLIANCE IN NIGERIA. (A CASE STUDY OF FEDERAL INLAND REVENUE SERVICE PORTHARTCOURT)

INTRODUCTION

 BACKGROUND OF THE STUDY

The fundamental reason for the imposition of tax is to generate revenue for the government. But numerous challenges facing the collection of tax has impeded on the revenue yield of government. According to Jibrin et al (2012), tax is a mandatory payment by government on persons and firms to generate revenue to meet government expenses. This is essential for the economic growth and development of the nation. Ogbonna and Appah (2012), stated that tax constitute one main source of government revenue all over the world”. Azubuike (2009), noted that revenue from tax is utilized by the government to provide public goods,  and essential social services for the people. Taxes represent an instrument of fiscal policy and major economic reform of the world. However, Ayua (1996) stated that the tax system in Nigeria is faced with challenges of tax evasion, avoidance and record falsifications leading to low revenue yield for the government.This development led to the introduction of electronic taxation which is an easy and friendly, user based platform to facilitate the easy collection of tax. Nellen (2003) posits that the aim of the electronic taxation is to impede revenue loss as a result of tax evasion and other fraudulent activities and to ensure neutrality. The Nigeria National Tax Policy (2012) stated that the benefits of electronic taxation include simplicity, certainty and economic efficiency. But, the implementation of electronic taxation is still at the infant stage. The study seeks to appraise the effect of electronic tax system on tax compliance in Nigeria. A case study of federal Inland Revenue Service Port Harcourt.

1.1 STATEMENT OF THE PROBLEM

The Nigerian tax system is sick and faced with many challenges. According to Nellen (2003), the challenge of tax administration include  poor tax collection, tax evasion, avoidance and record falsifications which constitute the reason for poor revenue yield for the government. The introduction of electronic tax system was to proffer solution to the challenges initially faced by the traditional method. Consequently the study seeks to investigate the effect of electronic tax system on tax compliance in Nigeria. A case study of federal revenue service Port Harcourt.

1.2 OBJECTIVES OF THE STUDY

The Main Objective of the study is to investigate the effect of electronic tax system on tax compliance in Nigeria. A case study of federal revenue service Port Harcourt; The specific objectives include:

  1. To identify the causes of tax fraud in Nigeria tax system.
  2. To examine the legal and administrative measures used to address tax frauds.
  3. To investigate the weaknesses in addressing tax fraud by tax authority.
  4. To establish the prospects and impacts of electronic taxation on the economy of Nigeria.

1.3 RESEARCH QUESTIONS

  1. What are the causes of tax fraud in Nigeria tax system?
  2. What are the legal and administrative measures used to address tax frauds?
  3. What are the weaknesses in addressing tax fraud by tax authority?
  4. What are the prospects and impacts of electronic taxation on the economy of Nigeria?

 

1.4 SIGNIFICANCE OF THE STUDY

The study shall determine the effectiveness of the electronic tax system in trying to address the challenges of tax collection and revenue generation for the government.

1.5 STATEMENT OF THE HYPOTHESES

The statement of the hypothesis for the study is stated in Null as follows:

HO: The effect of electronic tax system on tax compliance in federal revenue service Port Harcourt is negative.

HO: The level of tax compliance in federal revenue service Port Harcourt is low.

1.6 SCOPE OF THE STUDY

The study focuses on the appraisal of the effect of electronic tax system on tax compliance in federal revenue service Port Harcourt.

 1.7 LIMITATION OF THE STUIDY

The study was confronted with logistics and geographical factors.

1.8 DEFINITION OF TERMS

TAX DEFINED

Tax is a mandatory payment by government on persons and firms to generate revenue to meet government expenses. This is essential for the economic growth and development of the nation.

MULTIPLE TAXATION DEFINED

Multiple taxation is the imposition of tax by two or more jurisdictions on the declared income  asset or financial transaction

ORGANISATION DEFINED

Organization is a set of interactive processes that expected performance from them -executive operation of processes- is realized among different organizational units (Bayazi Tehranvand et al, 2009).

PRODUCTIVITY DEFINED

Productivity is viewed as the increase in the quantity of output produced over a given quantity of input from the productive system. National productivity is the increase in the living standard of the people.

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