ABSTRACT
This project titled the impact of tax reforms on the revenue generation in Nigeria was aimed investigating the tax reforms embarked on by the government and the yield thereof to the revenue generation in the country. In order to achieve the aim of the study, one hundred and twenty (120) questionnaires were administered out of which one hundred and ten (110) were adequately completed and returned. The data collected were analyzed using Regression analysis. Based on the analysis, it was found that: there has been some appreciable increase the tax revenue generation of Federal inland revenue service (FIRS) over the years and this can be attributed in part to the process of automation put in place by the federal government to shore up its revenue generation. Furthermore, the increase in revenue generation by FIRS can also be attributed to the process of capacity building instituted by the federal government. The capacity building put in place by the federal government which has helped increase the revenue generation of FIRS include: Given our findings, it was concluded that: the reforms introduced by the federal government have been successful in leading to increase in the revenue generation of Federal Inland Revenue Service. Given the findings and conclusions as enumerated above, the following policy recommendations are proposed: The revenue generated from tax by government should be used to provide infrastructures for the citizens. This will serve as a motivation for people to pay their tax. The members of the public should be fully enlightened by the government about the benefits of paying their tax and its effects on the economy. Finally, there is need for the government to bee proactive in its efforts of providing training for its tx collection staff.
The Nigerian Tax System has undergone significant changes in recent times. The Tax Laws are consistently being reviewed with the aim of repealing obsolete provisions and simplifying the main ones, (Oloyede, 2006). The Federal Government is taking various steps towards reforming the tax system, the recent pronouncement on the increase in the Value Added Tax (VAT) from 5 percent to 10 percent, particularly with the subsequent reversal and the controversy so far generated among stakeholders.
Nigeria as we all know is governed by a federal system; hence its fiscal operations also adhere to the same principle. This has serious implications on how the tax system is managed in the country. In Nigeria, the government’s fiscal power is based on a three-tiered tax structure divided between the federal, state and local governments, each of which has different tax jurisdictions. As of 2002, about 40 different taxes and levies are shared by all three levels of government. (Odusola, 2006)
The Federal Government had taken far-reaching steps aimed at reforming the nation’s tax system before the Pre 2002 reform efforts. Among these are; The 1978 Task Force on Tax Administration headed by Alhaji Shehu Musa. The major thrusts of the report of the task force are; Introduction of the Withholding Tax (WHT) regime, Imposition of 10 per cent special levy on Bank’s excess profits, Imposition of 21/22 per cent turnover tax on building and construction companies.
The 1992 Study Group on Nigerian Tax System and Administration headed by Professor, Emmanuel Edozien, recommended; The establishment of FIRS as the operational arm of FBIR and Setting up of Revenue Services at the other tiers of government (State and Local Governments).
The 1992 Study Group on Indirect Taxation headed by Sylvester Ugoh recommended a policy shift from direct taxation to indirect/consumption (VAT evolved). Source; (CITN, 2002).
Finally, there has been concerted efforts by the government to automate the process of revenue generation by providing Tax Identification Number (TIN) for companies and individuals. This is to enhance tax collection by making it possible that taxable entities are properly enumerated. In addition, the Federal Inland Revenue service has a better spread throughout towns and cities so that tax payers can more easily access their service. ............... FOR ACCESS TO THE FULL PROJECT WORK, USE THE ORDER NOW! BUTTON BELOW
INTRODUCTION
................ Tax reform is the process of changing the way taxes are collected and managed by the government. There have been a number of major changes in the tax system in Nigeria in recent past for a variety of reasons (Emuwa, 2009).
Azubike, (2009) noted that tax reform is an ongoing process with tax policy makers and tax administrators continually adopting the tax systems to reflect changing economic, social and political circumstances in the economy. Public revenue mobilization is one of the most keenly contested issues in Nigeria, (Adedokun, 2004).The Nigerian Tax System has undergone significant changes in recent times. The Tax Laws are consistently being reviewed with the aim of repealing obsolete provisions and simplifying the main ones, (Oloyede, 2006). The Federal Government is taking various steps towards reforming the tax system, the recent pronouncement on the increase in the Value Added Tax (VAT) from 5 percent to 10 percent, particularly with the subsequent reversal and the controversy so far generated among stakeholders.
Nigeria as we all know is governed by a federal system; hence its fiscal operations also adhere to the same principle. This has serious implications on how the tax system is managed in the country. In Nigeria, the government’s fiscal power is based on a three-tiered tax structure divided between the federal, state and local governments, each of which has different tax jurisdictions. As of 2002, about 40 different taxes and levies are shared by all three levels of government. (Odusola, 2006)
The Federal Government had taken far-reaching steps aimed at reforming the nation’s tax system before the Pre 2002 reform efforts. Among these are; The 1978 Task Force on Tax Administration headed by Alhaji Shehu Musa. The major thrusts of the report of the task force are; Introduction of the Withholding Tax (WHT) regime, Imposition of 10 per cent special levy on Bank’s excess profits, Imposition of 21/22 per cent turnover tax on building and construction companies.
The 1992 Study Group on Nigerian Tax System and Administration headed by Professor, Emmanuel Edozien, recommended; The establishment of FIRS as the operational arm of FBIR and Setting up of Revenue Services at the other tiers of government (State and Local Governments).
The 1992 Study Group on Indirect Taxation headed by Sylvester Ugoh recommended a policy shift from direct taxation to indirect/consumption (VAT evolved). Source; (CITN, 2002).
Finally, there has been concerted efforts by the government to automate the process of revenue generation by providing Tax Identification Number (TIN) for companies and individuals. This is to enhance tax collection by making it possible that taxable entities are properly enumerated. In addition, the Federal Inland Revenue service has a better spread throughout towns and cities so that tax payers can more easily access their service. ............... FOR ACCESS TO THE FULL PROJECT WORK, USE THE ORDER NOW! BUTTON BELOW
TABLE OF CONTENT
CHAPTER ONE: INTRODUCTION
1.1. Background of the Study ---------------------------- 1
1.2. Statement of the Problem ---------------------------- 2
1.3. Objective of the Study ------------------------------ 4
1.4. Research Questions ---------------------------------- 5
1.5. Research Hypothesis ------------------------------- 5
1.6. Significance of the Study --------------------------- 6
1.7. Scope and Limitation of the Study-------------------- 6
1.8. Organization of the Study --------------------------- 7
1.9. Definition of Terms --------------------------------- 8
1.10. Abbreviations -------------------------------------- 9
1.11. References -------------------------------------------- 10
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1. Introduction --------------------------------------- 11
2.2. History of Tax Reforms in Nigeria ---------------------------------- 14
2.2.2. History of the Current Tax Reform Process ----------------------- 16
2.3. Impact of Taxation on Economic Growth ------------------------------ 18
2.4. The Role of Taxation on Revenue Generation in the Nigerian Economy - 20
2.5 Tax Reforms in Nigeria ---------------------------------------------- 24
2.6. Tax Reforms in Rivers State ----------------------------------------- 26
2.7. The Procedures of Tax Reforms --------------------------------------- 31
2.7.1. Taking Appropriate Steps to Tax Reforms -------------------------- 31
2.8. Types of Taxes and Their Various Reforms -------------------------- 33
2.8.1. Personal Income Tax (PIT) ---------------------------------- 33
2.8 2. Company Income Tax (CIT) ------------------------------------------ 35
2.8.3. Education Tax --------------------------------------------------- 37
2.8.4. Petroleum Profit Tax (PPT) --------------------------------------- 37
2.8.5. Value-Added Tax (VAT) -------------------------------------------- 40
2.8.6. Capital Gains Tax (CGT) ------------------------------------------ 42
2.8.8. Custom Duties ---------------------------------------------------- 43
2.8.7. Stamp Duties ----------------------------------------------------- 44
2.8.9. Excise Duties ---------------------------------------------------- 45
2.9. Role of Tax Bodies on Tax Reforms --------------------------------- 45
2.9.1. Federal Inland Revenue Service, (FIRS) -------------------------- 45
2.9.2. Rivers Internal Revenue Service (LIRS) --------------------------- 48
2.10. Tax System on Nigeria: Issues and Challenges --------------------- 48
2.11. Suggested Solutions to the Problems ------------------------------- 52
2.12. References -------------------------------------------------------- 57
CHAPTER THREE: METHODOLOGY
3.0. Introduction ------------------------------------------------------ 61
3.1. Research Design ---------------------------------------------------- 61
3.2. Research Population ------------------------------------------------- 62
3.3. Sample Size Determination ------------------------------------------ 62
3.4. Data Collection Techniques ----------------------------------------- 63
3.4.1. Primary Sources of Data ----------------------------------------- 63
3.4.2. Secondary Sources of Data ---------------------------------------- 63
3.5. Design and Administration of Questionnaire ------------------------ 64
3.6. Data Analysis Technique -------------------------------------------- 65
3.7. Dependent and Independent Variable --------------------------------- 65
3.8. Validity and Reliability of the Research Instrument ---------------- 66
3.9. References ---------------------------------------------------------- 67
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1. Introduction -------------------------------------------------------- 68
4.2. Data Analysis and Interpretation ----------------------------------- 68
4.3. Testing of Hypothesis ---------------------------------------------- 85
4.3.1. Testing of hypothesis 1 ---------------------------------------- 85
4.3.2. Interpretation 1 ------------------------------------------------- 86
4.3.3. Testing of hypothesis 2 ----------------------------------------- 87
4.3.4. Interpretation 2 ------------------------------------------------ 88
4.4. Discussion of Findings --------------------------------------------- 89
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.0. Introduction ------------------------------------------------------- 91
5.1 Summary of Findings ------------------------------------------------ 91
5.2. Conclusion --------------------------------------------------------- 92
5.3. Recommendation ----------------------------------------------------- 93
APPENDIX
Bibliography ------------------------------------------------------------ 94
Questionnaire ---------------------------------------------------------- 99
Reference code: C062
Reference code: C062
76 Pages
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