APPRAISAL OF FEDERAL INLAND REVENUE COLLECTION SYSTEM

ABSTRACT
A tax is a compulsory levy imposed on the income or profit of an individual, partnership and corporate organisations for the financing of government expenditure without recourse to a corresponding benefit from tax payer. Assessments are raised on total profit at the rate of either 30 percent or 20 percent if it is a small company whose turnover is below 1million naira. Various types of assessment s are raised on the company. This could be self-assessment, government assessment, back year assessment, best of judgement (BOJ) assessment or jeopardy assessment. Collection is basic necessity to tax revenue after assessment has been raised. This research work is aimed at appraising the tax collection system in Nigeria taking Federal Inland Revenue Service as a case study. It examined the workings both at the local and state levels but focused more on the Federal Inland Revenue Services. It reviewed the old system, the reasons why a new idea muffed. The operations of the new method were also explained and clearly stated. The methodology adopted in this study is the survey research design. There were interactions with staff of Federal Inland Revenue Service of various cadres and a few tax payers and tax consultants with structured questionnaire to know their opinion. 56 questionnaires were administered out of which 35 were duly completed and returned. The findings from research work revealed that appraisal of tax collection system will bring more money to the coffer of the government and all incidents of frauds, cheque diversion and other malpractices will be curbed.

Based on the findings of this study, recommendations made are that constant monitoring of the activities of the designated banks is necessary to determine their level of compliance while adequate training should be provided for collection staff to enhance their efficiency and productivity.

CHAPTER ONE
INTRODUCTION
1.1  BACKGROUND OF THE STUDY
A tax is a compulsory levy imposed on the income/profits of an individual, partnership and corporate organizations for the financing of government expenditure without recourse to a corresponding benefit from tax payer.

Every tax imposed on Nigerian companies or organisations needs continual interpretation of its specific application and effect on the various transaction of the organisation. The field of taxation changes every moment or every day as announced by the new ruling courts and also as are being made by new government.

Tax is paid only on the profit of the company after all other deductions and allowances such as capital allowance, investment allowances. The rate of tax levied and payable for each year of assessment in respect of the total profit of every company is thirty kobo for every naira as contained in section 29 of Companies Income Tax Act 2007 as amended. A company which is yet to commence business after at least 6 months of incorporation shall for each year it obtains a tax clearance certificate pay a levy of (a) 20,000 for the first year and (b) ₦25,000 for every subsequent year before a tax clearance certificate is issued.

Where in any of the basis period for the year of assessment in which a company commenced business and the next following four years of assessment as determined under the provision of section 29 of the Act, a Nigerian company engaged in manufacturing or agricultural production, mining of solid minerals or wholly export trade, earns a total gross sales (turnover) of below one million naira, there shall be levied and paid by the company, tax at the rate of twenty kobo on every naira of the total profits.

Section 28A of Companies Income Tax Act 2007 states that where in any year of assessment the ascertainment of total assessable profits from all sources of a company results in a loss or where a company’s ascertained total profits results in no tax payable or tax payable which is less than the minimum tax then shall be levied and paid by the company the minimum tax as prescribed in subsection (2) of the Act.

If the turnover of the company is 500,000 or below and the company has been in business for at least few calendar years, be;
(i)                  0.5 percent of gross profits or

(ii)             0.5 percent of net assets or

(iii)           0.25 percent of paid up capital or

(iv)           0.25 percent of turnover of the years, whichever is higher.

If the turnover is higher 500,000 be whatever is payable in paragraph (a) of this subsection plus such addition tax on the

amount by which the turnover is in excess of 500,000 at a rate which shall be 0.125 percent.

The provision shall not apply to a company carrying on agriculture trade or business or the company with at least 25 percent imported equity capital and lastly, any company for the first four calendar years of its commencement of business.

Collection is basic necessity to tax revenue after assessment has been raised. The tax payer is expected to pay the assessed tax liabilities to any of the collecting banks in his or her region with the assessment notices indicating the tax type being paid. This could be company income tax, Education tax, Capital gains tax, Personal Income Tax for resident of Abuja, and non resident individuals, Value Added Tax.....

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Item Type: Project Material  |  Attribute: 112 pages  |  Chapters: 1-5
Format: MS Word  |  Price: N3,000  |  Delivery: Within 30Mins.
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