Tax Administration

Topics: Tax, Value added tax, Income tax Pages: 22 (6291 words) Published: April 30, 2013
Over the years, taxation has been taken as a veritable source of funding public sector activities as well as bein g an econ omic tool for the management of the con sumption, in vestment, and pr od uction patterns. In most d eve lopin g countries, the imposition of various forms of taxes has been with out some for ms of feed back on the effectiveness/efficien cy of such taxes. This stud y attempts to appr aise the usefulness of the tax system in Nigeria, usin g Value Added Tax system as a r efer en ce point. The significance of this stud y i s that it will enable th e government officials, r esear cher s an d econ omic analysts to appr aise an y type of tax, with th e aid of the par ameters used in this stud y. The stud y used th e ability to gener ate revenue and the ability to in fluence th e consumption pattern s as th e measur ement par ameter s and found that VAT has been effective but not efficient. The study r ecommended (amon g other s) that tax auth orities sh ould be r ecord/pr oprietar y-con scious su ch th at the cost ( bud get) of the collection machinery and a tar get amount payable to the gover n ment should be cover ed by th e expected r evenu e to be gener ated.

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KEYWORDS: Appraisal of Nigeria’ s Tax System, Value Added Tax System _________________________________________________________________________________________ INTRODUCTION
Tax is a compulsor y payment made on
different basis an d r ates by citizens
(cor por ate bodies and individuals) to
gover n ment, n on-n egoti ably but obligatorily.
This pa yment is not on th e basis of direct
exch an ge for the payment for goods and
services. It is n on -negotiable because none
of th e citizens have any dir ect contribution
to the composition of the basis and r ates of
payment. Government only classifies the
items on which the tax is to be paid, and the
categor y of citizens th at should be su bjected
to the payment ( Ariwodola, 2005). The
decision is h owever, based on the cost of the
pr ojects or pr ogrammes go vern ment inten ds
to execute, which is th e prin cipal
deter min ant of the bud get -size. Govern ment
also judges th e basis, r ates, the categor y of
citizen s, and the time period to pa y the tax,
on th e dir ection of th e econ omy desired and
gover n ment’s perception of the stand ard of
living of the citizens. This is wh y tax is
defin ed as a tool for go vern ment r evenue
and fiscal policy tool for directing the
econ omy. Taxes ar e not paid directly on th e
basis of exch ange contr act like any oth er
payments except su bsidies paid by
gover nment. It is paid by an y citizen
whether or n ot th e citizen benefits fr om th e
gover nment pr ojects and pr ogr ammes
fin anced by the taxes (Rosen, 2004).
Con sequently, th e usefulness ( effectiven ess
and/or efficiency) of taxes can be measur ed
by sever al par ameters, some which are its
revenue gener ating capacity and its impact
on th e consumption and savings patterns in
the econ omy. Even if the totality of tax
system cann ot be compr ehensively
measur ed, the various types of tax can be
su bjected to this measur ement. In Niger ia,
ther e ar e at least thr ee types of taxes that ar e
commonly applied to qualifying citizens and
items. Th ese ar e the Per son al In come Tax,
the Company In come Tax, and the Valu e
Added Tax. Th e assessment of th ese for ms
of tax ind epend ently or otherwise becomes
mor e n ecessar y given the multiplicity of
taxes in Nigeria, together with the pr oblems Research Journal in Organizational Psychology and Educational Studies (ISSN: 2276-8475) 1(6):338-344 Appraisal of Tax System In Nigeria (A Case Study of Value Added Tax) 339

of tax evasion and avoidan ce. It is against
this backgr ound th at this stud y is initiated.
In oth er words, this stu...
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