Tax Revenue Generation by Nigerian States-An Empirical Study of Self-Assessment and Tax-Collection Contracting Systems in Kwara State

  • Abubakar S. Kasum University of Ilorin
  • Azeezat K. Sanni University of Ilorin
  • Temitope O. Fagbemi University of Ilorin
Keywords: Self-Assessment, Revenue Generation, Tax Compliance

Abstract

Taxation as a source of revenue is very important to both the government and taxpayers. Self-assessment system requires taxpayers to compute tax liabilities and file tax returns themselves. Prior to 2011, tax collection was contracted to tax consultants and despite availability of taxable sources, states still rely heavily on federal government revenue allocation. This study investigates the effects of self-assessment tax system and tax professionals’ services on revenue generation by state governments in Nigeria. The study was a survey and data were generated through the administration of questionnaires to 80 members of staff of Kwara State Board of Internal Revenue.  Both descriptive and inferential statistics were employed for analysis in the study. The analysis reveals that self-assessment system has a significant positive impact on revenue generation, while tax professionals’ services did not have positive impact on revenue generation. It was recommended that the government should improve on the implementation of the self-assessment system and embark on adequate taxpayer education and public enlightenment on tax-related matters.

References

Abdulkareem, T. A. (2005). Report of the Accountant-General, Kwara State of Nigeria and the Financial Statements of the year 2002. http://www.kwarastate.com.

Alao, D.O. & Alao, E.M. (2013). Strategic control and revenue generation: a critical success factor in local government administration using the balanced scorecard. International Journal of Innovative Research & Development 10(2): 204-211.

Appah, E., & Ogbonna, G.N. (2014). Self-assessment scheme and revenue generation in Nigeria. Developing Country Studies, 4(10), 102-111.

Azubike, J.U.B. (2009). Challenges of tax authorities, taxpayers in the management of tax reform processes. Niger Account, 42(2), 36-42.

Becker, G.S. (1968). Crime and punishment: an economic approach. Journal of Political Economy 76(2), 169-217.

Brown, R.E., & Mazur, M.J. (2003). IRS’s comprehensive approach to compliance measurement. National Tax Association Spring Symposium. Washington, DC.

Consultants in Lagos State, Nigeria: Continuous Tax Evasion and Irregularities”.

Davos, K. (2012). The impact of tax professionals upon the compliance behavior of Australian individual taxpayers. Revenue Law Journal, 22(1),

Downs, A. & Stetson, B. (2011) Economic Versus Non-Economic Factors: An Analysis of Corporate Tax Compliance. Retreived from https://ssrn.com/abstract=1905075

Eissa, N. (1996). Tax reforms and labour supply. In Poterba, J. (ed.), Tax Policy and the Economy National Bureau of Economic Research. Massachusetts: MIT Press.

Enahoro, A.J., & Olabisi, J. (2012). Tax administration and revenue generation of Lagos State Government, Nigeria. Research Journal of Research and Accounting, 3(5), 133-139.

European Journal of Business and Social Sciences, 1(10), 25-35.

Ezeagba, C. E. (2014). Generation of Tax Revenue in the Nigeria Private Sector. African Review, 8(3), 64-77.

Fayemi, O. A. (1991); Principle of Local Government Accounting. Lagos: Chapter ten Publication Ltd.

Federal Inland Revenue Service (FIRS) “Handbook on the implementation of self-assessment tax regime in Nigeria” Federal Inland Revenue Service, Abuja Nigeria, 1-40,2012

Gambo, E.J., Mas’ud, A., Nasidi, M., & Oyewole, O.S. (2014). Tax complexity and tax compliance in African self-assessment environment, International Journal of Management and Review, 4(5), 575-582.

James, L., & Alley, C. (2004). Tax compliance, self-Assessment and tax administration. Journal of Finance and Management in Public Services. 2(2), 27-42.

Kasipillai, J. (2000). A Practical Guide to Malaysian Taxation-Current Year Assessment. Kuala Lumpur: McGraw-Hill.

Kasum, A. S. Akiniyi, O. & Ibrahim, A. S. (2005). The Effects of Differential Business Taxation on Investors’ Behaviour in Nigeria: An Empirical Study of Ilorin Metropolis. Sahel Analyst, 7(1), 46-56.

KPMG. (2012). Changes in the self-assessment regime in Nigeria: implications for taxpayers. Retrieved from http://www.kpmg.com

Lai, M. L., & Choong, K. F., (2009). Self-assessment tax system and compliance complexities: tax practitioners’ perspectives. Oxford Business and Economics Conference Program, Oxford University, Oxford, UK.

Loo, E.C. (2006). The influence of the introduction on self-assessment on compliance behavior of individual taxpayers in Malaysia. PhD thesis. University of Sydney.

Loo, E.C., McKerchar, M., & Hansford, A. (2010). Findings on the impact of self-assessment on the compliance behavior of individual taxpayers in Malaysia: a case study approach. Journal of Australian Taxation 1(13)

Malik, T. (2010) Achieving voluntary compliance through self-assessment tax regime. Self-assessment project of the Federal Inland Revenue Services Nigeria.

Mas’ud, A., Aliyu, A. A., & Gambo, E. J. (2014). Tax rate and tax compliance in Africa. European Journal of Accounting Auditing and Finance Research, 2(3), 22-30.

McLeod, J. (2013). Qualitative research: methods and contributions. (5th ed.). New York: Wiley

Modugu, K.P., & Anyaduba, J.O. (2014). Impact of tax audit on tax compliance in Nigeria. International Journal of Business and Social Science, 5(9), 207-215.

Nzotta, S.M. (2007). Tax evasion problems in Nigeria: A critique. Niger Account, 40(2), 40-43.

Odusola, A. (2006). Tax reform in Nigeria. Research paper, World Institute for Development Economic Research, United Nation University.

Okello, A. (2014). Managing Income Tax Compliance through Self-Assessment. Retrieved from https://www.imf.org/external/pubs/ft/wp/2014/wp1441.pdf

Okwori, J & Ochinyabo, S. (2014). A log linear assessment of the effect of value added tax (VAT) on revenue generation in Nigeria. Journal of Emerging Trends in Economics and Management Sciences, 5, 95-100.

Oladele R., Uduma S. A., Aderemi A. A. (2013) “Revenue Generation and Engagement of Tax

Oluwaremi, F., & Saidi, A.Y. (2014). The level of the effectiveness and efficiency of tax administration and voluntary tax compliance in Nigeria: (a case study of the Federal Inland Revenue Service). Research Journal of Social Science and Management, 3(10), 44-58.

Omoigui-Okauru, I. (2011). Effective and efficient tax collection and administration in Nigerian in the three tiers of government. Retrieved From http://www.rmafc.gov.ng/2011 on 23/01/2014

Omoigui-Okauru, I. (2012). No Nigerian State is Unviable. Retreived From http://www.thenigerianvoice.com

Organization for Economic Cooperation and Developmnt. (2001). Compliance measurement-Practice note. Paris: Central for Tax Policy and Administration.

Palil, M.R. (2010). Tax Knowledge and Tax Compliance Determinant in Self-Assessment System in Malaysia. PhD thesis. University of Birmingham.

Phillips, M. D. (2011). Reconsidering the deterrence paradigm of tax compliance. IRS-TPC Research Conference: New Perspectives on Tax Administration, Internal Revenue Service, 99-106.

Sapiei, N.S. & Kasipillai, J. (2013). External Tax Professionals’ Perception of the Corporate Taxpayers’ Compliance Costs and Behaviour under the Self-Assessment System. Retreived from: http://www.buseco.monash.edu

Shanmugam, S. (2003). Managing self assessment - an appraisal, Tax Nasional, 1st Quarter, 30-32.

Smith, K. W., & Stalans, L. J. (1991). Encouraging tax compliance with positive incentives: A conceptual framework and research directions. Law and Policy, 13, 35–53.

Witte, A.D., Tauchen, H., & Hall, G. (1987). Tax compliance research, models, data and methods.

Yahaya, L., Lawal, I., & Ahmed, A.J. (2013). Effects of corporate taxpayers awareness of tax authorities responsibilities on compliance behavior under self assessment system in Nigeria. International Journal of Finance and Accounting, 2(8), 459-464.

Published
2019-07-04
How to Cite
Kasum, A. S., Sanni , A. K., & Fagbemi, T. O. (2019). Tax Revenue Generation by Nigerian States-An Empirical Study of Self-Assessment and Tax-Collection Contracting Systems in Kwara State. Global Journal of Accounting, 5(1), 27-36. Retrieved from http://jsrd.unilag.edu.ng/index.php/gja/article/view/458
Section
Articles