ABSTRACT
The purpose of this study was to investigate the adequacy in personal income tax system in Nigeria using NIFOR as a case study. Survey research design was employed for the study. The population for the study consisted of both management and non management staff of NIFOR Edo State, Nigeria. 40 staff, members were randomly selected using simple random sampling technique. The instrument used for data collection were questionnaires and interviewers. The hypothesis was tested using Chi square at 0.05 significant level. The study reveal there is adequacy in PIT and it was recommended to improve efficient tax collection.
CHAPTER ONE
INTRODUCTION
A tax is a compulsory levy imposed by a public authority (First-Federal ILAND revenue Service) on the income gains profit and wealth of an individual or a corporate entity for public purpose.
Every nation has a tax policy in places so the Nigeria Government is not an exemption for government to impose taxation. It has some economic as well as social and financial implications.
For instance there are certain commodities which are not to be consumed trade, because it dose not contribute to the development of the economy as well as humanity hence government will places heavy tax and restriction on such commodities and usage. Cocaine and Indian hemp are products which are not encouraged to be produced or consumed hence government do not encourage but impose heavy sanctions on offenders.
Personal income tax (PIT) is a form of tax imposed on individuals who are either in employment (both public and private places) or are running their own small businesses under a business name or partnership. The collection of personal income tax is usually by the federal and state government, though local governments also collect taxes.
It is the responsibility of the federal inland revenue service to collect personal income tax from residents of Abuja as well as what may be described as highly mobile federal workers – staff of the ministry of foreign affairs and other Nigerians and foreigners outside the country byte earning income in Nigeria (Non-resident) expatriate workers residing in Nigeria police and military officers, civilians working in police and military formations.
However, they pay to their respective state of residence. The current law guiding the taxation of personal income tax came into effect in 2004 and it empowered federal and state tax boards to identify persons living in or earning income form Nigeria who by law are required to pay tax. The personal income tax is not adequate enough to cover taxes in Nigeria, self employment in Nigeria (Barbers GSM operators, mechanics spraying painters, market women and men hair dressers hawkers e.t.c) does not account for personal income tax vendors, bus conductors do not pay income can be determined and deducted at source that actually pay tax to the relevant authorities market women and men make profits which are not accounted for because our taxation system is not adequate enough to cover these lapses, where government would have earned huge revenue.
STATEMENT OF THE PROBLEMS
The execution of laudable projects by the federal, state and local governments is a function of adequate and available resources. Access to free health, education, pipe borne water, good roads etc. are the principal responsibilities of the both the federal states and local governments.
The study will attempt to address some of the reasons behind the adequacy of personal income tax and the solutions to be proffered. In view of this, the study intends to find solutions to the following questions
While is taxation not adequate in Nigeria?
What are the steps to be taken to ensure adequate tax system is in place in Nigeria?
Does Niger tax meets with international standards?
How will the relevant tax authorities harmonize effective tax system?
Are there relationships (positive or negative) between tax policies and the general economy?
Has taxation contributed progressively or retrogressively to individual tax payer and or also corporate bodies?
What are the economic, social and financial indications to show that question 6 above have been answered.
Has adequacy in personal income tax guided governments and tax authorities to stamp out frauds, illegal collection by tax officers?
