COMPANY INCOME TAX ADMINISTRATION IN NIGERIA PROBLEM AND PROSPECT (A STUDY OF FEDERAL INLAND REVENUE SERVICE OWERR)

 1.1     BACKGROUND OF THE STUDY

Nigeria is organized by a federal system, hence it fiscal federation adhere to the same principle. This has serious implication on how tax system is administered in the country. In Nigeria the government fiscal power is based on three yield tax structure divided between the federal state and local governments. Each having a different tax jurisdiction as at 2003 about forty (40) different lax and levels are shared among the three levels of government which are their sources of revenue.

The Nigeria tax system is lopsided and dominated by oil revenue. The most veritable tax is handled by the federal government and the lower tiers are responsible for the less buoyant ones. The federal tax corporate bodies while state government and local government tax individual except the residence of federal capital territory, personal income of police, armed force government of foreign affairs which are strictly for federal government. The federal government on average account for 90% of the overall revenue annually.

Tax collected comes back to the people inform of social amenities. As there amenities increase taxation assure as greater, importance since it’s the major source of government revenue. taxation encourages savings and update expenditure.

LITERATURE REVIEW

According to Ekwerike M.F. (2007), taxation as a compulsory payment required by government from member of the public to meet the demands and the expenses of government and the provision of general fits. lt is also seen as a process whereby communities or group of persons are made to pay part of income in some agreed quantum and the method for the purchase of the administration and development of their society.

According to Agyei, A.E (1993) tax is a fundamental, Compulsory Long income, normal human being will subject this earnings to tax people pay tax because the law Stipulated it.

According to (FIRS, 2012) tax is a source of generating revenue by communities or society of that form state to shoulder the public expenditure and improve economic, social and standard of living of the tax payers

According to Ola C.S (1994) Tax as a burden which citizens must bear to sustain which is mean to estimated. It is also seen as a system of compulsory contribution  usually monetary, levied by a government upon persons, corporate and property for some purposes.

STRUCTURES AND ADMINISTRATION OF NIGERIA TAX SYSTEM

Countries tax structure is a major determinant of macro economic indexes growth and development of any nation and it has very strong backing in the tax base of a country. Tax structure is determinate factor on the tax solicies and objectives of any nation development or under-developed.

Nigeria operates a three forced tax system and the administration of income tax rests on them with each having a different tax jurisdiction. The administration machinery currently includes:

1.The Joint Lax board (JTB)

2.The federal inland revenue services (FIRS)

3.The state board of Internal revenue (SBIR)

4.The local government revenue committee

PROCESS OF TAX ADMINISTRATION IN NIGERIA

lt should be noted that Nigeria tax model follows that of her colonial masters the U.K model in which the government assumes that the tax payer does not know the tax laws and it is the duty of the government to compute individual’s tax liability and demand some form tax payers.

in order for the government to do this effectively shares of process are normally followed;

1. Giving of Notice: Each relevant authority is required to give notice to the tax payer to decide their income for the purpose. Such may be given in news papers or government gazelle (i.e. income tax firm).

2. Assessment: The tax authority will raise assessment on the tax payer after expiration of period within which returns are made. It may be based on information governed by the tax payer or best of judgment (i.e) when the time specified, Moreover te assessment notice will be conveyed the tax payer through an assessment letter.

OBJECTIVES OF THE TAX PAYER

The tax payer has the right to object to the assessment. If he is not satisfied with the assessment the objection must be made within 30 days of such notice of assessment and 21 days in the case of individuals and companies respectively

Appeal: Any person is not satisfied with the treatment of his objection may appeal to the appeal committee set up by the federal  ministry of finance,

PROBLEM OF TAX ADMINISTRATION IN NIGERIA

The Nigeria tax administration faces serious complex and multidimensional problem. As Ola (2010:10) summarized below revenue realized from income tax is low because of the low level of literacy poor relationship between tax payer and income tax authorities and the adequate number or complete absence and qualified accountants on the staff of the authorities. Unqualified staff do not know how to get information of the technical methods of how best to use information made available to them.

SUMMARY OF FINDINGS

Some of the findings of this research work include the

following

a. Improve administration of income tax inefficiency

b. Few out of the taxable adults pay tax because they want all their civil responsibilities

c. improving income tax administration in Nigeria leads lo letter prospects

c. Civil servant pay more tax than the self employed. This is true because Linder the pay-as-you-earn system the farmer is obligated to pay tax.

e. Tax officials demanded and accept some gratification from tax payers; because the needed some incentives to the following are neither attributed causes of nor payment of adequate taxes

F. honesty among the tax officials

g. some motion forward tax payment

CONCLUSION

Conclusion of this research work is drawn from he following;

There is improper administration of income lax in Nigeria Improving income tax will lead to better prospects. Few taxable adults pay just to fulfill their civil obligations and civil servants pay tax more than the self employed persons because of the PAYE System. tax official demand some incentives to work and are faced with poor working conditions. There is dishonesty among Tax officers.

BIBLIOGRAPHY

Ekwerike m.f (2002) “company income tax in Nigeria aba  maxcom educational publishers.

Agei A.k (1993) “income tax laws and administration in Nigeria” lagos west African books publisher limited.

Ezejulue, A.C & ogwo, O.E (1990) “Basic principles in      management projects” Onitsha African publisher limited.

Nworun G.E (2001) “Basic Research Methodology for Research                        Traines & Trainers” lagos Amboc printers.

Adeola S.M (1996) “Principles of federal income tax in Nigeria”  lagos west African books publishers limited.

Nwachukwu, U.O & Egbulonu K.G (2002) “ Elements of statistical inference “1^st Edition.