Taxation as a major source to Government funding has been chosen
as a topic for this research work because of the incessant an inevitable
reduction in the growth of the economy which has it’s resources and finance
from tax. Like the individual make money to solve their unlimited needs, the
Government too generated revenue for the executive of her project and provision
of essential infrastructures that maker life worth living, like building of
roads, schools, bridges, provision of sound education, provision of pipe borne
water, defence and others.
This not withstanding there are still some degenerating problems
encountered in the assessment and collection of tax in Enugu State. This is a
result of inefficient tax administrative machinery, which had led to poor
compliance by the taxable citizens of the State.
Based on this development, faster steps had to be taken to keep
the flag of tax collection in Enugu State flying as tax is the life and brain
wire of every economy.
Now that taxation is the surest and most viable source of fund its
therefore necessary to re-associate all the available tax sources. This study
touches all those strategic points and radial solutions so as to collect more
tax for the state to maintain the ego of a major source of fund for the government.
This research work of Tax as a major sources of Government Funding
/Case study of Enugu State Board of Internal Revenue is carefully prepared to
highlight and to review some strategic points towards creating more strength
into the assessment and collection of Tax in Enugu State.
Tax is the oldest form of revenue and a major source of revenue
for the Government. As a result of this, radical decisions and recommendation
has also be given in this study to solve some inherent problems encountered in
tax collection, like training of staff, providing adequate working material for
tax assessment and collection. Incentives to workers disciplinary measures for
tax evaders and organizing seminars and workshop on tax collection.
After going through this work one can easily ascertain comparable
figures from other revenues and from tax as to prove authenticity of the
project topic Tax as a major source to government funding.
1.1 Background of
1.2 Statement of the
1.3 Purpose/ objectives of the study
1.5 Significance of the study
1.6 Limitation of the
1.7 Delimitation of the
1.8 Historical background of the Board of
Internal Revenue Enugu
1.9 Definition of
2.0 Review of Related Literature
2.1 Importance of Taxation in
2.2 People’s View About
2.3 Theories Purporting the Nature of Taxation
2.4 Types of
2.5 Ascertainment of income for Tax
2.6 Indirect Taxes
2.7 Tax Administered in Enugu
2.8 Duties and Powers of the Board of Internal
Revenue Enugu State
2.9 The Goals and Objectives to the Board of
2.10 Organs of the
2.11 The non Tax Revenue Sources
3.0 Research Design and Methodology
3.1 Sources of
3.2 Survey Instruments
3.4 Statistical Treatment of Data
3.5 Techniques of Data Presentation
3.6 Method of
4.0 Presentation ,Analysis And Interpretation Of
4.1 Data Presentation
5.0 Findings, Recommendation and
5.2 Recommendation and
1.1 BACKGROUND OF THE STUDY
Taxation is a major instrument for the conduct of public policy.
This is true for both developed and developing countries. Taxation is known to
accomplish a number of objectives revenue generation for government, economic
stabilization and income re-distribution. Taxation as an instrument of public
policy is essentially concerned with the manipulation of financial operations
of both the government anti private sectors with a view of furthering certain
In Nigeria these economic objectives includes the attainment of
appreciable level of full employment, avoidance of excessive inflation, achievement
of satisfactory balance of payment position. Appreciable increase in the
national income and a reduction of extreme inequality among the citizens,
provision of other essential necessities of life like water, school building of
bridges roads and others.
The question now arises, How does the finding of these activities
come about? The government can only discharge these duties by generating enough
revenue to provide enough finance for the accomplishment of these tasks ahead
and the Board of Internal Revenue is by law charged with the responsibility for
assessing, collection and accounting of all taxes in Enugu State.
The government to the individual and payable to the economic and
social responsibilities define taxation as a compulsory levy. In Simon’s income
tax (1852)LordMaccnaghten quoted “ Income tax is
a on income. Its not meant to be tax on anything else”. Dalton (1954:23) defined tax as a
compulsory contribution imposed by a public authority irrespective of service
rendered in return. Income tax law and practice by Njokamma. CA. Defined income tax
as a creative of statute. In interpreting its provisions. “ No equity, no
intendment” or anything else should be implied. The clean terms of the law
should be applied but no necessarily restricted against the revenue.
Nevertheless tax is not the only sources of government revenue
other sources include.
¨ Fines and fees
¨ Motor licensing fees
¨ Rent on government quotas
¨ Interest and depayments
¨ Dividends and Royalties on government
¨ Share holdings
State share of federal government disbursement.
¨ Loans and grants
¨ School fees
¨ Hospital fees
Revenue from government parastatals likes the water co- operation
The private sector is not left out in the fund generation do their
own fund comes inform of borrowing private savings etc
The absence of well-organized and locally controlled money markets
for borrowing has faced private sectors in most developing countries especially
Nigeria to rely primarily on fiscal measures to mobilize domestic monetary
resources for fund generation. For instance if profits of taxation, the
marginal efficiency of investment will decline and consequently a fall in
investment is observed. On the other hand if profit of investment are increased
through low tax rate the marginal efficiency of investment will in investment is
However Duke Man (1962
P .462) said that for an effective tax system that encourages investment, has
to some extent be based on high rates, a fact peculiar with the paradox of
investment stimulating taxation, and as well discrimination, so long as it is
significantly qualitative and psychologically substantial. This suggestion may
not augur well for investment activity where retained profits and savings form
the buck of capital formation.
Realizing the importance to finance as the train wires of economic
growth the government initiates financial policies through annual budgets and
tax laws to fund and provide necessary extension services for these business
enterprises and also through several government financial policy, ensures
adequate financing of small scale enterprise.
We are now convinced that of all these source of revenue by
government that tax contributes the largest proportion. With charges in these
considerations above attention have been focused on the fiscal policy best
suited to the economic development of the country. As part of the search for
desirable fiscal policies high consideration is placed on the value of goods
and services payable by the final consumers. The collections of this tax are
accountable to the federal government by the federal wand Revenue, while a
reasonable percentage is given to the state where VAT is collected from.
Nevertheless the implementation of various government measures the
their effects are most times, at variance with the objectives of government.
Some of the revenue collection agencies are either ill equipped to carry out
their functions effectively or equipped with personal of dubious character who
trust laudable objectives of the government. Most tax papers don’t pay
willingly, some take laws into their hands to either evade or avoid tax wile
others collide with some tax official as well as employ the services of tax
experts to explore the tax loophole. As a result of such ill activities towards
taxation there is always a short fall in the government-projected revenue.
In view of the importance to taxation as a principle source to
government funding as well as a powerful instrument in the conduct of public
policies. This study is aimed at exploring all avenues of tax collection in
Enugu State and the performance of the Enugu State Board of Internal Revenue to
keep the flag flying in support of the topic to the study that taxation is a
major source of government funding.
1.2 STATEMENT OF THE PROBLEM
Tax constitutes the greater percentage of internally generated
revenue in Enugu State and as well the major source of fund for the government
financing its activities,. Tax however has its fundamental problems in the area
of Administration and management.
There is deficit in planning, control and Adequate information
flow of Tax collection generally. Since the government financial policy and
objectives is to ensure adequate fund and conducive environment for the
people’s satisfaction through progressive taxation and other fiscal measures
designed to end the rapid growth and development of the society for the benefit
of the citizenry.
It is therefore necessary that these avenues of fund are
solidified. But on the other way round the implementation of the government
taxation policy and the realization of the taxation goal most a times run at
variance with the policy outlined in the annual budget as well as the tax laws
provisions. Many individuals as well as organization see taxation policy as
being harsh and unfavourable. They argue that while few enterprises especially
large company continues to benefit from the government support through grants,
Subsidies and other tax incentives. Others find the policies unbearable as a
result any little opportunity by such people to evade or avoid tax is highly
The results of all these tax evasion and avoidance are that less
revenue that envisage is collected through tax by the government and thereby
less social amentias than proposed are carried out.
These problem will be solved as soon as an efficient machinery is
set in motion for effective administration and review of state tax laws if made
1.3 PURPOSE/OBJECTIVES OF THE STUDY.
The objectives of the study is finding way of making the tax
system effective and putting up measure that will help the government realize
adequate fund for its developmental activities.
Other objectives are
1. To discuss and analyze the taxes being
administered and Eungu state.
2. To ascertain the total value of taxes collected
during the period year by year.
3. To determine other sources from which the Enugu
State Government can generate more tax revenue.
4. To ascertain other sources of the government
revenue improve on them.
5. To make suggestions on ways of increasing the
total revenue of the state government both tax and other sources of revenue to
To really achieve these objectives efforts will be made to:
1. Identify all the problems militating against
effective tax assessment activities.
2. Analyze the problems and execute the suggested
3. Suggest implementation strategies with a
view to assisting the management in carrying out government policies and
4. Bring the problem to the focal eyes of the
department and government.
5. Sensitizes the government and create the
awareness on the people with abysmal attitude towards tax payment and its
consequence on the economic and social development of the state.
H0: Tax is not the major source of
H1: Tax is the major source of
H0: There is no significant
relationship between tax revenue generated by the state.
H1: There is significant
relationship between tax revenue and total revenue generated by the state.
H0: Tax Administration system in
Enugu state is not efficient and there is mismanagement.
H1: Tax Administration system in
Enugu State is efficient and there is proper management.
H0: Nigeria government does not
adequately accomplishes her taxation problems.
H1: Nigerian government adequately
accomplishes her taxation problems.
SIGNIFICANCE OF THE STUDY
The study will help to evaluate the tax revenue generated and
assess the tax collection machinery set in motion in Enugu State. It will also
help to evaluate the tax and the government is exploiting other revenue source
available to the state and how these source.
This study if properly utilized will enable the Board of Internal
Revenue and the State Government to know the problems effecting tax assessment
and collection in the state.
The study will also reveal how far the tax policies in Enugu State
are being implemented furthermore strategies on improving on the revenues
generation has mapped out for the provision of infrastructure. As a
result of this, there will be high standard of living for the tax papers of the
Finally it is meant to enlighten the citizen of the state to know
the objectives of tax and thereby reducing tax evasion and avoidance.
1.7 SCOPE OF THE STUDY
This research work is supposed to have covered the tax
administration and its revenue generation system and the comparison with other
sources of government revenue in Nigeria. Some tax administrated by the Federal
Government like Company income tax, petroleum profit tax, capital gain tax,
capital transfer tax could have been involved in this research.
Due to the limit time constraint, shortage of information supply
and financial constraints, the study cannot be extended to these major parts
and has therefore been limited to the administration of tax as applicable in
Enugu State Government.
HISTORICAL BACKGROUND OF BOARD OF INTERNAL REVENUE ENUGU STATE.
The present day Enugu State Board of Internal Revenue would like
most government agencies traced its orgin to when the colonialist established
their government in Nigeria. The needs for government to generate revenue to enable
her execute her programmes brought about the Division of the Ministry the
Independence in 1060. And because of the expending responsibility, that the
Board of Internal Revenue was established as an autonomous government agency,
charged with the sole responsibility of the tax assessment and collection
within their jurisdiction in the then Eastern State of Nigeria. Therefore the
present day Enugu State Board of Internal Revenue has metamorphosed through
various governments such as Eastern Nigeria, East Central State of Nigeria,
Anambra State Board of Internal Revenue now the most prominent and the highest
revenue generator of all the extra ministerial departments in Enugu State.
The government of any nation, State or local government formulated
and implements policies for the welfare of the populace. The government at any
level has various organs through which it executes these policies so formulated
for the interest of the Board of internal Revenue and of which the government
has charged with assessing collecting and accounting for all taxes collected
within this state.
The present day Enugu State Board of Internal Revenue has only (2)
two zones as against (3) three zones before the creation of Ebony state. These
tow zones are 1. Enugu Zone comprising of eighteen Tax offices and (18) motor
licensing offices (2) Nsukka Zone comprises of (12) twelve Tax offices and
motor license offices.
All these tax and motor licensing office has their protem
headquarters at the quarters in Enugu State. The two zones has their zonal tax
authorities charged with collection and coordinating all tax activities in such
zones. At the end to the every month these zones are duty bound to render their
monthly return to tax collection for the month.
At the end of every month or on a quarter month basis the
statistic department called the planning. Research and statistics section with
collect, summarize and analyze these return of collected and come out with a
wide chart that will bear all the monthly tax collection and t4h total figure
for the year ended 19… This chart will be carefully prepared that at a glance
one will see the total amount of tax collection for every fiscal year.
DEFINITION OF TERMS
Some of the terms used during this research, which have special
application to study, are defined:
¨ Revenue: This is the gross receipt or receivable of a
governmental unit derived from taxes, custom and other main sources of
government revenue but excluding appropriation and allotment from the
consolidated Revenue fund (CRF).
¨ Tax: The Oxford Advanced Learners Dictionary of
current English DEFINES tax as “(sum of money purchase etc) to the government
for public purpose”.
Tax can also be defined as a compulsory levy by natural or
cooperate, payable to the government for the benefit of the citizenry.
calculation the tax due to the paid by an individual.
Collection: Staff of
the Board charged with collection of taxes from the public.
¨ Zonal Tax
are senior tax officer charged with assessing and collecting of tax within
¨ Tax Law: These are laws made by the government prone to
review as well giving the guidelines and draft on how and paid. These laws are
standard guiding all the tax offices in the federation. Examples are ITMA 1961
Income Tax management Act 1991 etc.
Income management Act (ITMA): These are laws committee
guiding the collection and payment of tax in Nigeria.
This was promulgated in 1961 but since been amended.
TERMS AND CONDITIONS APPLY
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