THE EFFECT OF TAX ADMINISTRATION ON REVENUE GENERATION IN ENUGU STATE. (A CASE STUDY OF THE STATE BOARD OF INTERNAL REVENUE ENUGU STATE)

INTRODUCTION

1. BACKGROUND OF STUDY

In all generation, the problems of personal income tax generation and

administration continues to surface in one form or another in virtually every society, especially in this part of the world. It is important to point out that the federal government has taken adequate steps in effective tax administration.

This failure on the part of the federal government is responsible for poor financial positions of both the state and local government. Besides, this inadequate planning and absolute laws governing taxation, evaluation and collection is characterized by chaos.

This chaotic nature of the system can be appreciated by political influence or interferences in the process of taxation during the civilian administration in the country which gave rise to untrained and inexperienced personal being entrusted with the work of collection and administration of personal income tax.

The important of these issues to tax administration in the developing countries like. Nigeria, can be seen from the following extract from tax

administration in under developed countries. The tax administration finds himself working with a staff which is inefficient in experienced, and poorly paid.

BOARD OF INTERNAL REVENUE ENUGU

The board of internal revenue Enugu was established to administer income tax in Enugu state just as there are likely to states of the federation.

Income tax was first introduced in Nigeria in 1904 by late Lord Lugard. The introduction of Native Revenue ordinance of 1927 was most difficult in the Eastern areas of the country, due mainly to absence of recognized central Authority Resistance to this form of direct taxation in such that it result to riots notably in calabar, Owerri and the famous, Aba women Riot of 1929 which was so severe that it attracted a probe. Beside, the Native Revenue ordinance were also Native direct taxation ordinance for the colony and the Native income tax ordinance.

These ordinance were late modified and incorporated into the Direct taxation ordinance No 29 of 1940, cap 54 and the income tax ordinance No 29 of 1943 respectively.

The direct taxation ordinance 1940 empowered native authorities to tax Africans in their areas of jurisdiction while the income tax ordinance 1943

was for the taxation of non-Africans in companies. The two ordinances were the foundation of our modern taxation which necessitated establishment of board of internal revenue in each of the states of the federation which Enugu Board of internal Revenue is one of them.

ADMINISTRATIVE STUCTURE OF THE BOARD OF INTERNAL REVENUE IN

ENUGU STATE

The chain of administration in the state board of internal revenue

THE EXECUTIVE CHAIRMAN

SPECIAL ASSESSMENT UNIT LEGAL UNIT  INFORMATION UNIT

The zonal tax Authority which Enugu North Board of internal Revenue belongs to the Enugu Zonal Authority. The highest authority in the Area is the Assessment Authority.

THE ASSESSMENT AUTHORITY

The assessment officer is the head of the board of internal Revenue in the area. He is appointed by the Board of internal Revenue, Enugu State. He is responsible for the assessment of tax and its collection and as well as accounting for it. He carries out the duty with the help of collection, Assessment and Administrative officers. He is directly in change of assessment and administration. He has the power to issue notice to tax payers to deliver statement of incomes or to finish further returns.

Where there is suspected doubts as to geniuses of returns, he might ask the tax payer to produce before assessment Authority books and documents of the tax payer covered by pay as you earn (PAYE).

The Assessment Authority could ask an employer to prepare and deliver a return on his employees. After assessment and responsibility of collection of this assessed income rests on the tax collector. He makes use of tax agents, tax drivers or the workers of the board and other processes which may be applied from time to time to generate tax in the area.

ADMINISTRATIVE FRAMEWORK

The structural administration of personal income tax is rested in the joint tax Board (JTB) under the income tax management Act 1961.

The board is made up the chairman who is appointed by federal Board of internal Revenue (FBIR) which is the federal body. The personal must be experienced in tax matters. Also, a secretary and a legal adviser are appointed, some of their functions are:

To exercise the powers or duties conferred upon them by any express provision of the Act, and any other power and duties arising under the Act which may be agreed by the board.

To exercise the powers and duties conferred on them by any enactment of the Federal Government imposing tax on the income or properties of companies or which may be agreed by the Federal Board of internal Revenue.

STATE INTERNAL REVENUE BOARD

The administration of the income tax in each states its collection and administration is vested on the state Board of internal Revenue.

It is headed by a chairman with the Director of Revenue as his Deputy Chairman and the chief executive of the board. Other members of the board

include representative of specified ministries and from field economics, accountancy and legal professions.

Their major function includes, to see the retrieval of the revenue collected by various tax officers in all local government head quarters and forward it to state government for disbursement.

INSPECTOR OF TAXES

Inspector of taxes are controlled by the Board. They have variety of duties covering all aspects of taxation some of their duties are:

1. Receipt and examination of tax returns and other information from tax payers.

1. Preparing and issuance of assessment based on the returns on which tax is payable.

1. They also employ the best of judgment guesses, if returns were not received or there is evidence of false information.

TAX COLLECTORS

They are concerned with the service of

1. Returns of income forms

1. Notice of assessment

1. Summonses and affidavits and other sources of information.

1. STATEMENT OF THE PROBLEMS

It is true that problem of tax collection and administration is universal but the third world countries of which Nigeria is one, seem to be more plagued and inflicted both in weight and magnitude than the developed nations of the world.

The research work primarily involves identifying the problems of the personal income tax generation and administration in Nigeria taking a case study of Board of Internal Revenue, Enugu state. The specific problems of this research are as follows:

1. Improper system of keeping accounts and records in the internal Revenue office, which was seen to be quite mechanical and out dated.

1. Lack of staff and inadequate training of the available tax collectors.

1. No enlightenment on the part of tax payers as regards the importance of taxation is another problem of tax generation and administration in Enugu state.

1. Tax collection and administration in Enugu state is not efficient and efficiently managed.

Also corrupt alliance of tax collectors with tax payers to avoid tax for them (tax collectors) to