Income Tax Generation: Prospects and Problems

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PROBLEMS AND PROSPECTS OF PERSONAL INCOME TAX ADMINISTRATION ON ACHABA RIDERS IN KANO METROPOLIS

BY:

ADAMU GARBA ZANGO DEPARTMENT OF ACCOUNTING FACULTY OF SOCIAL AND MANAGEMENT SCIENCES UMARU MUSA YAR’ADUA UNIVERSITY KATSINA STATE, NIGERIA Email:zangoage@yahoo.com Phone No: 08024043404, 07057541413

Abstract This Paper examines the problems associated with the Assessment and Administration of Personal Income Tax on Motorcycle riders (Achaba) in Kano Metropolis. The study uses Primary data involving face-to-face interviews and observations, while descriptive survey was used to analyze the data. The paper utilizes the stratified random sampling technique in selecting 28 units out of the 294 units in the Metropolis. One hundred and fifty (150) Achaba Riders were randomly selected, observed and interviewed using the interview and uncontrolled/unstructured observation method. The main findings of the research are that, tax officials lack adequate training and experience in carrying out their assignment. Similarly, shortage of staff, payment default on Direct Assessment Tax System (DATS), insufficient financial resources available to the tax authority and lack of Political will on the part of Government in enforcing the tax laws were also found to affect the revenue generation drive of the State. The paper also finds that Motor cycle (Achaba) riders do not pay any form of tax or levy to the State Government, but have very high expectations from it, in the provision of infrastructural facilities like Roads, Bridges, Hospitals, Motor cycle Loans etc. The paper recommends that the State Government in conjunction with the tax authority should embark on proper recruitment, training and development of staff, provide good remuneration packages to tax officials, provision of adequate working facilities, and embark on massive enlightenment of the taxpayers on the importance of tax payment. This, it is believed, will enhance the revenue generation of the State, by bringing in hitherto none tax payers into the tax-paying circle. Finally, the paper strongly recommends a form of Personal Income Tax on Motor cycle (Achaba) riders, as it is a promising Industry that could assist the State in terms of revenue generation. Key words: Income Tax Administration: Achaba Riders, Kano Metropolis

Electronic copy available at: http://ssrn.com/abstract=2193961

Introduction A Government must have money to pay for its activities and commitments. It has to pay the civil servants. Money is also needed for other expenditure beside the payment of salaries and wages. There also Building school, provisions of chairs and tables in the school, building bridges, roads, etc. Government(s) finances come through taxes i.e. payments made by the people (individuals) to the government on annual basis (Niven, 1971). An income tax is a tax levied on the financial income of individuals, corporations, or other legal entrepreneur. Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax levied is on the income of companies, it is often called a corporate tax, corporate income tax, or profit tax. Individual income taxes often comes from the total income of the individual, while corporate income taxes is often from net income of a business organization. The concept of taxing income is a modern innovation and presupposes several things: a money economy, reasonably accurate accounts, a common

understanding of receipts, expenses and profits, and an orderly society with reliable records. For most of the history of civilization, these preconditions did not exist, and taxes were based on other factors such as wealth, social position, and ownership of the means of production (typically land and slaves). Practices such as tithing, or an offering of first fruits, existed from ancient times, and can

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Electronic copy available at: http://ssrn.com/abstract=2193961

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