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Taxation is a fiscal measures used by government to control the economy as well as raise funds for infrastructural development, level up income and promote equalitarianism in the society. However, in collecting taxes, government all over the world are with the several problems such as obtaining correct assessment, mobility of tax collectors, inadequate office equipment and suppliers and fraud by tax officials. These and other problems necessitated this study on “Assessment and Administration of Personal Income tax in Akwa Ibom State.The study set out among other things to examine the administration of personal income tax in the state; to ascertain whether staff motivation will lead to more tax collections and to identify and proffer solution to the states problems in tax assessment and collection. The study utilizes both primary and secondary data sources. In primary data, questionnaire response from a selected sample structured was analyzed on tables. While secondary data involves an exhaustive review of related literature. The four research questions formulated were also analyzed on tables using percentage as the statistical tools.
1.1 BACKGROUND OF THE STUDY
Personal income tax administration Akwa Ibom state is carried out by the board of internal revenue. The tax has been imposed on the income of individuals and corporate bodies for the purpose of generating revenue for the development of the state other forms of generating revenue for the development of the state according to Ntegoho (1990) include sales of government property, miscellaneous collection rents, grants and share from federation accounts.
Ola (1985) enumerates the various form of tax to include personal income taxes, capital gain taxes and petroleum profit taxes and here the attention is focused on personal income tax. The administration of personal income tax is a form of direct taxation which is levied on income of individual and corporate bodies but one of the problems is that it affects the income of a tax payer directly from whatever it might come from. Examples are salaries, wages, pensions, allowance, interest, rent and bruises, the categories of people liable to personal income tax are civil servants, business owners (small and big) employees of companies as well as professionals, this is one of the numerous problems affecting the administration of personal income tax.
According to Hareman (1976) no citizens pay tax with a smile and since tax cause oral resources and some means of incoming their satisfactions through market transaction, Umoh 1984, states that the government does not exist buying powers from citizens on the importance of taxation pointing the need to employ adequate and qualified persons in the revenue department to carry out these functions effectively.
In Akwa Ibom State, tax administration or within jurisdiction of the state board of internal revenue. Tax assessment involves, according to Etim (1991) the assessment, collection and accountability of tax money collected from tax payers by the offices. The collection of taxes was the duty of the native administration before the establishment of the board of internal revenue. The board of internal revenue is a parastatal in the ministry of finance and economic planning set up by former Eastern region of Nigeria in 1965.
However, the state board of internal revenue is charged with the responsibility of raising assessment collecting taxes and accounting for collected (Ola 1984). Tax collectors and tax agents also pay a very important role in the collection of personal income tax from the payers. Personal income tax is a major source of government internally generated revenue.
Udofia (Informant) maintain that this single source constitutes 70% of the total tax revenue derived in Akwa Ibom state. Haveman (1976) state that the backbone of the tax structure is the personal income tax. The realization of huge amount of revenue from personal income tax entails a lot of activities. The Akwa Ibom State board of internal revenue took its counterparts in other states is saddled with many problem and prospects in the administrative of this personal income tax.
To ensure effective administrator of taxes in Nigeria and indeed Akwa Ibom State, the Raisman fiscal commission of 1957 had to be formed. In 1959, the commission submitted its recommendation which called for the introduction of Nigeria basic principles for taxing income of persons other than limited companies. Ola (1984), states that this recommendation was accepted and it formed the basis of the prospect of the administration of personal income tax.
The problems of personal income tax administration in Akwa Ibom state include lack of proper accounting records kept by private business owners as well as inadequate finding of revenue generating machinery. Those problems have in their various capacities acted against the realization of enormous sum of money from professional income tax in Akwa Ibom State.
The background of the study stand from the fact that board of internal revenue is always facing a staff challenge on the administration of personal income tax. Even though the administrative prospects of its type of tax is high. In practicality it seems the problems faced by this kind of tax revenue of not properly managed could account for inefficiency on the part of the accountants.
Revenue generation which means more than bringing in revenue from known sources but implies bring in revenue from old sources and also looking for more ways of bringing revenue from the new source. In effect the Akwa Ibom State board of internal revenue is obsess with problem militating against successful administration of personal income tax and also how to handle the high prospect if seems to embedded in.
1.2 STATEMENT OF THE PROBLEM
The government of Akwa Ibom State at the inception of every year announce budget made of estimated expenditure and revenue during the 12 months of the year. One of the items of revenue has always been personal income tax. It is disheartening to see that over the year the actual revenue derived from personal income tax has fallen below the estimate due to certain constraint facing tax administration in the state.
Then revenue accruing to the Akwa Ibom State government, both from the federation account and from the internally generated sources, have not been sufficient for it to carryout statutory function to its citizens such as the provision of basic socio and other infrastructural facilities required from industrial development of the state. Besides the increasing role of the government, in the area of provision of essential services to its citizens following the rapid increase in population of the state demands that the government should intensify its revenue gene rating efforts by equipping its revenue generating machinery so that the problems of personal income tax administration could be solved.
The problems for the wide variations between the actual estimated revenue from personal income tax with view of making some recommendations for improvement especially toward the prospects that kind of tax generation has.
1.3 OBJECTIVES OF THE STUDY
The following are the objectives set for the study:
- To examine the administration of personal income tax in Akwa Ibom State.
- To find out whether the tax laws give the staff boards of internal revenue the requisite qualification to efficient personal income tax administration.
- To ascertain whether motivating the staff would improve the level of the tax collected
- To examine the root problems of personal income tax administration and its prospect in Akwa Ibom State board of internal revenue.
- To make suggestions and recommendations the way to improve personal income tax administration in Akwa Ibom State.
- To find out the problems militating against proper enhancement or documentary of personal income tax.
1.4 SIGNIFICANCE OF THE STUDY
The study would assist the government to review revenue generation activities in all the local government areas of the state through the board of Internal Revenue of the state and update current operation with the finding made. The resultant effect would be increased in internally generated revenue of personal income tax administration even in the face of dividing federal allocation.
The state government would benefit from this study as there would be less dependent on revenue allocation from the federal account because the researcher believes that the study would be out to the mere garment of the board of internal revenue service, the best method of administration of personal income tax. It would also bring out the problems encountered by the board in administering personal income tax.
Again, it would help to bring out the problem encountered by the board in administering personal income tax. It would also help in educating the revenue contributing public to better appreciate and perform their civil responsibilities of supporting the finance of government.
1.5 SCOPE AND LIMITATIONS OF STUDY
This study is on the problems and prospects encountered and identified in personal income tax administration at the board of internal revenue. The study would consider the pattern of administration of personal income tax, how income is generated from it and the possible reaction of personal income tax.
The study shall be limited to the board of internal revenue, Idongesit Nkanga secretariat, Uyo in Akwa Ibom State due to the sensitive nature of the subject matter of this study, staff opposition is expected from the operations of accelerated revenue generation programmes in the state and resistance or indifference attitude of this study might have it validity and services reliability affected due to unavoidable limitation.
1.6 RESEARCH QUESTIONS
The following are the research questions:
· What are the modern methods of revenue generations adopted in Akwa Ibom State board of internal revenue?
· What are the prospects of personal income tax in Akwa Ibom State?
· What are the problems encountered in personal income tax administration by Akwa Ibom state board of internal revenue.
· Will the staff of board of internal revenue of Akwa Ibom State to be able to say whether they do exercise the powers conferred on them by the tax laws in the course of personal income tax administration.
· Will the staff of board of internal revenue be able to identify and spot out the primary reasons for the problems failed in personal income tax administration?
· Will the staff of the board of internal revenue is say what their roles in personal income administration.
· Will the staff of the board of internal revenue in Akwa Ibom state be able to tell whether motivating them will lead them to implore on their administration of personal income tax.
1.7 DEFINITION OF TERMS
Although all technical used in this prospect has been explained and defined at the point of usage the definition of terms as used here for clarity and avoidance of ambiguity.
Tax: This is according to David Lawis (1994) is a charge or burden usually laid upon persons or property for public purpose, while (Buhari, 1993) defines it as a compulsory combination for individual and or business organization for the purpose of financing government expenditure.
Taxation: Okroven (1992) defines it as the process of assessing; collecting and accounting for tax revenue by relevant tax authority.
Tax Administration: Tax administration Is meant for the prudent management of human and material resources to bring about efficient, fail and effective tax assessment, collection and accountability so as to adhere other economic and socio-political objectives of the government.
Income: Peque and sgnots (1978) defines it as the value of all goods and services accuring to a person during the period.
Personal income: (David 1981) defines it as earned or received by an individual.
Personal Income Tax: According to Buchanan flowers (2000), it is a coercive levy by government on the individual or person with income as the criterion for determining task liability while Havenman (1976), views it as the tax levied by the federal government on the income of private individuals.
Administration: This is defined in 1986 by Roger Carter is a system co
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