EVALUATION OF FINANCIAL ABUSE IN THE PUBLIC SECTOR OF NIGERIA
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EVALUATION OF FINANCIAL ABUSE IN THE PUBLIC SECTOR OF NIGERIA
CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
The main goal of writing this project “on the evaluation of financial abuse in the federal inland revenue service” is to bring to the readers’ attention the source from which the government derived its revenue and how its expenditure was controlled,
as well as to identify the evaluation of financial abuse in the federal inland revenue service and some control measures that the government could use to present the financial abuse in the federal inland revenue service.
The federal inland revenue service is the appropriate government organ institution primarily responsible for tax collection, while the revenue mobilisation and fiscal commission operates as a department within the federal ministry of finance.
The federal government of Nigeria considered it necessary to form a revenue division from the federal ministry of finance as part of the reorganisation. As a result of being an autonomous organisation known as the Federal Inland Revenue Service, the board became more effective in revenue collection for the federal government.
Financial mismanagement, embezzlement, and waste in the public sector is an endeavour by the government to identify the numerous major areas that course all abuse in the public sector and also evaluate the approach to be employed.
As a result of all abuses, this research would delve extensively into the organization’s financial strategy, evaluate the accuracy and dependability of the accounting clate, and increase operational efficiency.and promote conformity to official ‘policies and guidelines.
In light of this topic, it follows that there must be some elements that every organisation must implement in order to manage some financial transactions in that organization’s custody and security of assets. The purpose of the study is to identify the various sources of revenue for the federal inland revenue service, which are as follows:
VAT, Personnel Income Tax, Custom Duties Company Income Tax, Education Taxe Capital Gain Tax, Import Duties and Export Duties Petroleum Profit Tax, and so on, and to examine the financial records of the federal inland revenue service to determine whether there is an adequate system of internal control in the organisation.
The evaluation of financial abuse in the federal Inland Revenue Service encountered some possibly unusual issues concerns addressed the financial record accuracy of the tax administration in Nigeria have generated a lot of attention and debate, and some people have urged for a system overhaul.
That we should do things that are unique to the Nigerian setting and leave out others that are not. The board is dealing with a number of issues, including:
1. PERSONNEL shortfall: Because the personnel department plays an essential role in the state’s revenue collection system, a staff shortfall has the potential to jeopardise the goal of maximising personnel income tax collections by 1996. Senior officials in the federal inland revenue services intended revenue were 286 but present were 354, a drop of at least 50%.
2. ASSESSMENT TAX PROBLEM: The assessment tax problem revolves around the location of the personnel income tax and the determination of his assessable income. The efficacy of personnel income tax administration can be judged in terms of the ratio of actual to potential coverage.
3. TAX PAYER CURRUPTION: The tax payer fails to pay the exact amount due to bribery of the tax collector in order to decrease the actual amount received as taxes.
4. CORRUPTION AMONG TAX OFFICIALS: During the revenue tax collection process, officials, particularly the tax collector, must print their receipt booklet and issue it to the tax payer without their knowledge
and meanwhile that the duplicate carries is not what the original was reading, they may use carbon paper to the duplicate, at times the revenue collector would receive money from the tax payer without even issuing a receipt to them.
5. INFLATION: Due to the persistent rises in the general price of goods and services, the purchasing power of salary continues to dwindle to the point where your salary could not buy you even enough food for the month.
To deal with this problem, employees in the public sector resort to a variety of methods, the majority of which are either fraudulent or illegal in nature.
6. NEGLIGENCE OF DUTIES: The majority of employees ignore their responsibilities and engage in inappropriate behaviour, such as missing work before the officially declared closing time. Others may arrive late and leave abruptly, causing the work burden to pile up. Furthermore, public funds are either misappropriated or pocketed for personal gain.
7. INADEQUATE SUPERVISION: Monitoring the actions of individual employees is critical; any attempt to allow employees to work independently without monitoring and supervisors assigning responsibilities without authority may make cohesion very difficult.
The following measures should be used to detect the impact of financial abuse in the public sector:
a. Internal command and control system
a. Cash and cheques received by mail
c. Sales and collections in cash
d. Deposit into a bank account
e. Cash and bank accounts
f. Payment with a cheque
1.2 STATEMENT OF THE PROBLEM
Despite the economic disadvantages of financial abuse in the public sector, the federal ‘inland revenue service is experiencing a lot of problems with regards to mismanagement of funds, which includes cost capturing,
which is one of the financial abuses in the federal inland revenue service, the ‘officials are not available to record that mostly in respect of capital income tax and valued added tax, which if properly captured would not boost the nation revenue base.
Another financial abuse in the federal Inland Revenue department is the inability to display proper data in federation accounts, which makes detecting fraud extremely difficult.
The failure of some staffs to declare their valued added tax collection and proper actions would not be taken in headquarters due to the involvement of some personnel in the headquarters, the revenue mobilisation allocation and fiscal commission has urged the federal Inland Revenue Service to intensify its effort in recouvering huge amounts of money from tax collection.
1.3 OBJECTIVES OF THE STUDY
– To identify various revenue sources in the Federal Inland Revenue Services in Abuja.
– Determine if the federal Inland Revenue Service in Abuja has an effective internal control system.
– To investigate the sufficiency and qualifications of personnel employed by the Federal Inland Revenue Service in Abuja.
– To identify tax collection issues confronting the federal Inland Revenue Service.
– To investigate the sources of financial inefficiency in the federal Inland Revenue Service in Abuja.
1.4 THE HYPOTHESIS STATEMENT
In every research project, it is critical for the researcher to establish a hypothesis statement that will guide the researcher’s thinking about the research issue. This will allow the researcher to develop a solution to the research topic.
The following hypothesis would be formulated to enable the researcher to devise means of solving the research problem for this research study.
Ho = The federal Inland Revenue Service does not operate efficiently because of financial misuse in the public sector.
The efficient operation of the federal Inland Revenue Service is the evaluation of financial misuse in the public sector.
1.5 SIGNIFICANCE OF THE STUDY
The following persons will benefit from the study:
1. Students – it would be beneficial to students for future research in the same subject of study.
2. Government – In order to accomplish essential change and guarantee that funds are channelled efficiently.
3. The Federal Inland Revenue Service (FIRS) will benefit in assessing and evaluating the efficiency of tax collecting operations.
1.6 SCOPE OF THE STUDY
In as much as the researcher wanted to present as many material facts about the topic under study as feasible, a number of facts or hindered me from doing so. The first consideration is financial limits.
The researcher encountered financial difficulties, which were required from the beginning to the finish of the research effort. A shortage of funds prevented me from collecting additional data for the study.
The project development was additionally hampered by a time constraint. The researcher, who was both a worker and a student,
faced the challenge of finding time to visit the school library and his supervisor for relevant information and enlightenment board in order to avoid financial uses in the limitation of the study’s research.
1.7 HISTORICAL BACKGROUND OF THE FIRS’
The Federal Inland Revenue Service of Nigeria was established in 1943. During the colonial era, it was carried by the former Inland Revenue Department, which covered what was once Aglophone West Africa (including Ghana, Gambia, and Sierra Leone).
Tax income used to pay the government ensures resource redistribution, boosts consumption of particular goods and services, reduces inflation, and creates jobs.
The Federal Inland Revenue Service is authorised by the Constitution to collect taxes.
The Inland Revenue Board was founded in 1958 as part of the Income Tax Ordinance of 1958. The name was modified later in 1960, when the Federal Board of Inland Revenue (FBIR) was founded under Section 4 of the Companies and Income Tax Act (CITA) No 22 of 1961.
FBIR operated as a department within the federal ministry of finance until 1993, when the finance (miscellaneous taxation provisions) Act No. 3 of 1993 established the Federal inland revenue service FIRS as the operational arm of FBIR. The Act also established the office of the executive chairman of the board.
The Federal Inland Revenue Service Establishment Act (2007), which gives the service autonomy, was strengthened in 2007. The federal Inland Revenue Service has decided to make available a list of our operational offices, jurisdictions, and phone numbers.
This directory is a guide for all tax payers on how to best access our services. It is our intention that this directory will foster ongoing engagement between FIRS and tax payers, guiding the service on how to best serve you. The boards are made up of:
a. The executive chairman of the service, who shall be experienced in taxation, shall be chosen by the president and subject to Senate confirmation.
b. The president will designate six workers with relevant qualifications and competence to represent each of the six geopolitical zones.
c. A representative of the federation’s attorney general.
d. The governor of the Nigerian Central Bank or his representative.
a. A ministry of finance representative not lower than the position of director.
1.8 DEFINITION OF TERM
It is usually required for research to define terms that are often used in research work; some of the terms utilised are as follows.
1. Internal control system: To carry on the affairs of an organisation in an orderly manner, safeguard the assets, and ensure the accuracy and reliability of the………
2. Cash and checks received by mail: Ensure that cash and checks received by mail are accounted for and recorded in the book.
3. Cash sale and collection: Ensure that all cash from cash sales and collection that should be received is appropriately accounted for and recorded.
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