AN APPROVAL OF THE PAY-AS-YOU-EARN SYSTEM OF TAXATION IN NIGERIA (A CASE STUDY OF SUKKA LOCAL GOVERNMENT AREA)
ABSTRACT: The goal of this research is to offer a practical strategy for evaluating the pay-as-you-earn taxation system in the Nssuka local government region. Two hypotheses were developed to lead this study. To ensure a strong conclusion for the study, a review of the literature was conducted.
The analysis used in this research endeavor was chi-square, which was devised and conducted by the researcher to confirm that the results produced were actual and not by chance. According to the preceding statement, some of the significant findings include data display and analysis.
The fifth chapter discusses the researcher’s findings and recommendations, as well as the conclusion. Finally, the researcher will contribute to the current literature by evaluating the pay-as-you-earn taxation scheme.
The scope of study and limitations describe the areas that the researcher will touch on when discussing the appraisal of the pay-as-you-earn system of taxation system are places or locations that have been unable to be examined due to time constraints.
CONTENTS TABLE
CHAPITRE ONE
0.1 INTRODUCTION………………………………………………
Problem Statement…………………………………….
The Study’s Goal…………………………………….
Significant………………………………………………..
Hypothesis Statement………………………………..
The Study’s Scope…………………………………………
The study’s limitations………………………………….
Terminology……………………………………..
CHAPITRE TWO
2.0 REVIEW OF RELATED LITERATURE………………..
2.1 Taxation Definition………………………………….
2.2 Taxation Functions……………………………………..
2.3 Taxation Regulation……………………………..
CHAPITRE THREE
DESIGN AND METHODOLOGY OF RESEARCH
3.1 Data Sources……………………………………………
Primary Information…………………………………………
Secondary Information…………………………………….
3.2 Samples utilized………………………………………………
3.3 Investigation Method…………………………………….
CHAPITRE FOUR
4.0 Data Display and Analysis
……………………………
4.1 Data Display and Analysis
……………………………
4.2 Hypothesis Text…………………………………………
CHAPITRE FIVE
FIN DINGS CONCLUSION AND RECOMMENDATION SUMMARY
5.1 RESULTS …………………………………………………
5.2 CLARIFICATION ……………………………………………
5.3 RECOMMENDATION…………………………………….
BIBLIOGRAPHY……………………………………………
APPENDIX…………………………………………………
CHAPITRE ONE
INTRODUCTION
The global economic recession, which began in the 1980s as a result of a decline in the economic growth of the nation’s industries, a high rate of inflation, a dramatic rise in the price of crude oil, an increase in the cost of important commodities,
a massive build-up of liquidity in the international capital market, and unusual fluctuation in commodity prices, was not fully felt in Nigeria until 1982, when developed countries implemented a series of restructured monetary and fiscal policies to curtail the a
Seventeen years ago, in 1983, the World Bank said that the protracted industrial world recession hampered growth in industrialized countries. Oil price declines caused problems for poorer countries that export oil.”
In its report on Nigeria, the bank claimed that the country’s foreign exchange resource fell in 1982 from a level comparable to three months’ worth. Investment, which accounted for around one-third of GDP in 1980–1981, has been drastically decreased as both foreign exchange and government resources have contracted (85 percent of government revenue, both federal and states are direct generated from oil export).
An attempt to wiggle the country out of its financial bind resulted in the first in a series of belt-tightening measures implemented since 1982.
Among these measures are:
Ban on the import of a large number of goods, particularly taxes on luxury goods, enforcement of trick exchanges control reputation liberalized during the earlier boom, wages and ban on employment in the public sector, increased external borrowing in anticipation of oil income, and, most recently, the implementation of a value added tax (v.a.t).
The consequence of declining federal government revenues and the ever-decreasing percentage of statutory allotment to states has sparked intense interest in alternative revenue sources. As a result, previously liberal tax regulations are being strictly enforced, and various types of levies are being imposed in various states of the federation.
The Nsukka local government area of Enugu state is not immune to the nation’s economic downturn. The personal income tax (PIT) imposed on all taxable persons in the local government is one of the principal sources of revenue for the local government,
second only to statutory allocations from the state and federal governments. Personal income tax is levied either through the Pay-As-You-Earn (PAYE) system, in which employers deduct tax from their employees’ earnings and pay it to the division, or through the Alternative Minimum Tax (AMT).
In this study, I am interested in evaluating the effectiveness and efficiency of Pay-As-You-Earn (PAYE) as a tax collection mechanism. The analysis of the system’s weaknesses will be carried out, and based on empirical observations, appropriate recommendations will be made as to how loopholes in the system could be filled, especially at this time of widespread knowledge of the vast potentials of domestically generated revenues.
PROBLEM STATEMENT
The public’s expectations of governments (local, state, and federal) in developing countries are such that the latter are saddled with responsibility for the provision of a variety of services. Section 16 (a) of Nigeria’s constitution of 1979 states.
“The state shall administer the national economy in such a manner as to provide the maximum welfare, freedom, and happiness of every citizen as the foundation of social justice and equality of status and opportunities,” it states unequivocally.
In order to meet these expectations and sometimes constitutional requirements, the government relies on the imposition of various taxes, whether direct or indirect, on the defined taxable persons in their jurisdiction. Such a tax, as well as a poll tax
These taxes are collected at the source and include dividend, interest, and rate taxes. In addition, personal income tax induction through the Pay-As-You-Earn (PAYE) system has been efficient in meeting its objectives of minimizing collection expenses and reducing tax evasion while raising revenue to local governments. We will all investigate the Pay-As-You-Earn system problem and propose solutions to any issues that may arise.
OBJECTIVE OF THE STUDY
The study’s goal can be summarized as follows:
to determine the effectiveness of the Pay-As-You-Earn system on personal income tax receipts over a ten-year period
To educate taxpayers on the accuracy of the information they supply on their tax returns and to determine the percentage of those who do not provide the information.
To determine whether there is a link between the accuracy of information provided by taxpayers in their tax filings and their age.
To identify the difficulty (if any) faced by the internal revenue division and labor employers when implementing the PAYE system.
To learn how employers view the PAYE system and what improvements they would recommend.
Based on my results, suggestions and recommendations will be made that I believe will be beneficial to the local government. It is also hoped that future researchers in the field of public finance would find the work to be a helpful source of literature.
SIGNIFICANT
The importance of adequate revenue for a developing economy like Nigeria’s cannot be overstated. This research is being carried out in order to expose the underlying flaws in the Pay-As-You-Earn taxing scheme.
The suggestion and recommendation made on how to close system loopholes. The huge potential of internally generated money would be very useful to governments, especially at this time of widespread weakness.
The local government will find it highly useful in calculating revenue and other taxation ways, which will help to control the government’s ever-diminishing revenue.
THE HYPOTHENSIS STATEMENT
A hypothesis is a reasoned supposition that, if tested, could be true or wrong.
As a framework for this research, the following hypotheses were developed: I The success of the Pay-As-You-Earn system has not affected personal income tax revenue.
Hello there (ii) Personal income tax revenue has been impacted by the efficacy of the Pay-As-You-Earn scheme.
1.5 STUDY SCOPE
The investigation will be limited to determining if the Pay-As-You-Earn system is an efficient and effective method of collecting personal income tax (PIT) in the NSUKKA local government.
It thus excludes any other system of tax collection through a Pay-As-You-Earn system, with other tax revenue being analyzed solely for comparative purposes.
THE STUDY’S LIMITATIONS
The following restrictions hampered the study:
There was a scarcity of relevant texts, journals, and films on the Pay-As-You-Earn system.
Some of the responses and opinions offered in response to the questions were subjectively based on personal experience.
A research of this type would necessitate more time than I had available.
There is a prevalent issue in Nigeria where many people do not want to disclose their incomes.
The funding offered for this study was insufficient given its extent and my financial situation as a student.
TERMS DEFINITION
BASIS PERIOD: the time period during which a taxpayer’s income is assessed for tax reasons.
ASSESSABLE INCOME: A taxpayer’s income from all sources in a given basis period, less all permissible deductions and nontaxable income.
PRECEEDING YEAR BASIS: A basis period used to assess a tax payer’s income in the year preceding the year of assessment.
ACTUAL YEAR BASIS: the period for which a tax payer’s income in the preceding year of assessment is assessed in that year.
YEAR OF ASSESSMENT: the fiscal year in which a taxpayer’s income is evaluated for tax purposes.
INCOME CHARGEABLE: Assessable income less all reliefs.
RELIEFS: A deductible allowance granted by law to a taxpayer in a relevant year of assessment.
TAX EVASION: the illegal act of paying less tax than is required.
Do You Have a New or Fresh Topic? Send Us Your Topic
AN APPROVAL OF THE PAY-AS-YOU-EARN SYSTEM OF TAXATION IN NIGERIA (A CASE STUDY OF SUKKA LOCAL GOVERNMENT AREA)
INSTRUCTIONS AFTER PAYMENT
- 1.Your Full name
- 2. Your Active Email Address
- 3. Your Phone Number
- 4. Amount Paid
- 5. Project Topic
- 6. Location you made payment from