CHAPTER ONE
INTRODUCTION
1.01 GENERAL DESCRIPTION OF THE AREA OF STUDY
According to Rabiu (1986) the law of improved PAYE
assessment and collection in Nigeria
have their source in Raisman fiscal commission of 1975. The recommendation of
this commission was accepted by the Government as it relates to income tax of
section of the Nigeria Constitution order in council of 1960 subsection (ii)
and (iii) gave concurrent powers to the parliament to make laws for Nigeria or
any part, therefore with respect to certain enumerated uniform principles in
relation to improved PAYE assessment and collection exercise of the power conferred
upon it. The Federal Government enacted the personal income tax Act 1993
generally known as the (P.I.T.A)
Similarly, the Federal Government which was responsible
for the administration of the Federal Territory, enacted the personal income tax (Lagos) Act 104 of 1993.
The western regional principle tax law chapter 48 was
for the purpose of being it in line with the personal income tax Act (P.I.T.A)
amended in 1993 by the income tax (Amended) law 1993 which repealed the
financial law of 1956.
The Northern region which had not enacted its own income
tax law before the personal income tax act came into operation, enacted the
improved PAYE assessment and collection law in 1994 to be read as one with the
personal income tax Act.
Nigeria modern form of income taxation however, only begin in
1940. Although there was a simple type tax back to 1927. Northern
Nigeria was the first of the buy direct tax under Fulani Emirs
Prior to the British.
Government use taxation as a fiscal policy to the level
of potential output for example before the 1911 century in China, farmers were
taxed in units of gain produced and this attempt brought about an improve in
the total output thereby contributing to the national of the state.
In Ebonyi State, the government had to rely primary on fiscal
measures to mobilize domestic resources for the economic development of Ebonyi State.
Taxation (personal income tax Act) had been the principal instrument employed
for the mobilization or in pursuance of such resources.
This study is therefore look into senticizing the citizenry
for improved PAYE assessment and collection to the economic development of Ebonyi State
as it will interest you to know.
1. Historical background of taxation.
2. Meaning of taxation.
3. Types of taxation.
4. Meaning of pay as you earn
5. Meaning of sensitizing the citizenry.
6. The function of pay as you earn.
7. The problems and prospect of PAY as you earn.
8. The contribution of sensitizing the citizenry for
improved PAYE assessment and collection
1.02 HISTORY OF CASE STUDY/ORGANIZATION
According to Mr. Ikwor O. the tax authority of Afikpo
North Local Government on 20th July, 2011. The Afikpo Zonal Board of
Internal Revenue was established during the creation of new state. Since then,
it has passed from one government to another, from Imo state government in 1976
to Abia state in 1991 and Abia to Ebonyi state in 1996. The office is headed by
an assessment author Mr. Ikwor O. who is also the zone tax authority for Ebonyi
south zone, the office is divided into different section:
An Assessment
Section: This section covers
assessment record such as tax payer personal file, nominal roll and omnibus
files.
The main work of section is assessment of tax payer
using the available information, the section also conduct the investigation tax
payer collect and utilize pay as you earn unit, is also under assessment
section they collect information in respect of employees and determine tax
accordingly.
Collection Section: This is headed by a tax collector to ensure that asset
are collected including PAYE. The tax collector also ensures that money
collected are not only paid to the bank. State Board of Internal Revenue
controls the local unit by receiving the statement of remittance of tax paid
from the zonal office where as the commissioner to whom it is remitted has the
reconcile the account with the state treasury.
1.03 STATEMENT OF PROBLEM ANALYSIS
Taxation in every sense is tools of economic reformation
governments the world over have always find ways of imposing various taxes on
their people with a view to raising revenue for its expenditure and which
general tax is one such major source of taxation. Therefore constituence a varitable.
However, the objectives are not always being achieved
due to certain set back traced to the management to senticize the citizens for
improved PAYE assessment and collection.
These set backs are:
1. Low level of literacy resulting to inability of keeping
records of business transactions.
2. The problem of identification of the tax payers
especially the self employed in small trade and business.
3. Man power problem in tax authority.
4. Most of the literate sole proprietors and some
professional deliberately refuse to keep record of their income and expenditure
thus avoiding tax.
5. The non-resident individual are usually evasive and
difficult to identify. This is because they sometimes sneak into the country
earn their income unnoticed and have without paying tax.
However, this study is focused on the senticizng the
citizenry for improved PAYE assessment and collection.
1.04 PURPOSE OF THE STUDY
It is the researcher belief that though the base of this
research shall in the main be the senticizing the citizenry for improved PAYE
assessment and collection of Government in Ebonyi state, the fact finding and
recommendation shall also be applicable to other states or their tax
authorities faced with the improved hindering PAYE assessment and collection of
Government.
Since initial survey on senticizng the citizenry for
improved PAYE assessment and collection of Government had revealed some lapses,
the objective intended to be achieved through this study may be summarized as
listed below:-
1. To find out whether the senticizing the citizenry for
improved Assessment and collection of Government due to its administration.
2. To determine the impact of personal income tax has on
the individual tax payer.
3. To suggest ways of improving the administration of
personal income tax.
1.05 RELEVANT RESEARCH QUESTIONS
1.
Will the management
and staff of Board of Internal Revenue Afikpo not be able to tell the
historical background of taxation?
2.
Will the management
and staff of Board of Internal Revenue, Afikpo not be able to defined the
meaning of Taxation?
3.
Will the management
and staff of Board of Internal Revenue, Afikpo not be able to explain the types
of Taxation?
4.
Will the management
and staff of Board of Internal Revenue, Afikpo not be able to defined the
senticizing the citizenry for improved PAYE?
1.06 DELIMITATION (SCOPE) OF STUDY
This study was indeed limited to Ebonyi State Government
Afikpo zone only. Secondly, the study was limited by financial time and lack of
co-operation of some of the respondents in the state Government.
1.07 ASSUMPTIONS
It was assumed that the Internal Revenue Afikpo would
co-operate with the researcher by completing the questionnaires and returning
them to the researcher to enable him carry out the study.
1.08 SIGNIFICANCE OF THE STUDY
It is anticipated that the results of this study will
help, bring to light the problem of personal Income Tax Act, which will aid the
management and staff of Afikpo Zone Board of Internal Revenue, Ebonyi State
in their income tax assessment and collection.
It is the researcher candid hope that this study will
serve as a reference to individuals, both in government employment and self
employed, the tax authority and the general public.
1.09 DEFINITION OF UNFAMILIAR TERMS/CONCEPTS
1. Tax authority: The person or body of persons responsible under the law
of territory imposing income tax for the administration of that law usually the
inland Revenue Departement fo Ministry of Finance.
2. Earned income: This is income derived from the exercise of carrying on
a trade, business, professional, vocation or employment and income derived from
a pension in respect of any previous employment.
3. Place of Residence: A place available for domestic use in Nigeria and
does not include any place of temporary lodging where a more permanent place is
available for domestic use. P.I.T.A 1993.
The Personal Income TAX Act
governing general income tax.
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