CHAPTER ONE
INTRODUCTION
Abstract
Tax
is any form charge levied on a person or an institution by a governing body or
its equivalent such that defaulted payment is punishable by law. The imposition
of taxes and the institution of taxing is as old as civilization itself cutting
across religion, race and continental borders. Prompt tax payment and reduced
tax evasion is always a primary objective of the government in most
civilizations that exist today. The issue of tax evasion has proven to be a
difficult practice to curb even in nations with a proper database of its
citizenry and the current mode of tax payment is redundant and hectic. Some of
the challenges governmental bodies have to overcome in order to encourage the
prompt payment of taxes and effectively reduce evasion includes, developing
convenient payment methods and having proper records keeping systems. This
paper is a concise summary of how the continuous development of computing
science and its wide spread ability to be deployed to solve a wide range of
problems can be geared towards the development of an electronic remote taxation
system to assist government bodies with convenient tax collection and record
keeping. The waterfall methodology was selected for system development. Goals
to be achieved by the system are instant access, improved productivity through
efficient utilization of resources, database creation and records management,
simplification of operations, reduced processing time, user friendliness, portability
and flexibility for further enhancement. This system looks at how tax payment
can be encouraged through simplification and increased efficiency in payment
processing.
1.1 Background of the Study
Computer based online tax payment (E-tax payment) system is a
computerized online payment system which allows fast and easy monitoring and
payment of taxes online. The system
under study, Board of Internal Revenue (BIR) Jalingo is an agency owned by the
Government of Taraba State which helps to generate revenue for the state
government through tax payment and other activities that they carry out. The current system was established in year
1991 by the state government as a means of generating revenue. The system is
located at 56, Hammaruwa way Jalingo. Presently, the system has the following
departments: Commissioner of finance, Interim Management Committee (IMC), Interim
Management Committee (Operations) and IMC (Corporate Services) etc.
The current system (BIR) under study are making use of manual
methods which is slow in carrying out operation and also creates employment for
individuals which is one of the measures to reduce crime rate and unemployment
rate in our country today.
1.2 Statement of problem
The existing system makes use of manual method of collection of
taxes and handling of other operations which involves the use of paper and pen
to keep records. This makes the process to be inconsistent, tedious, time
consuming and prone to mistakes. Most times, tax payers are discouraged because
the process of manual task collection involves them queuing for long hours and
filling different forms just to pay their taxes. Due to lack of a computerized
system tax payment system, the current system has been encountering a lot of
challenges which include: Mentality of carrying out jobs manually which is
inefficient, cumbersome (difficult or complicated), time consuming and at times
in accurate, problem of poor communication between the various departments
involved, problem to ensure that taxpayers who need information can obtain it
accurately and on time, poor identification of taxpayers, problem of logistics
etc.
This study proposes a computerized system that tends to address all
of the challenges being encountered by the current system. The system will be a
web based application which tax-payers will use to pay their taxes remotely and
the administrator(s) of the system can automate the processes involved in
managing tax payment.
1.3 Aim and object of the study
The aim of this study is to design, implement and
evaluate remote tax payment system. The objectives of this study are to satisfy
the user needs as follows:
a. To
satisfy the user need and requirement as cost effective as possible.
b. A
system that will be easy to use and user friendly.
c. A
system that will process data accurately, so that the user can be confident of
the information stored in the tax file database.
d. System
that will take proper record on the number of taxpayer to avoid double payment.
e. A
system that is capable of checking error verification and validation.
f. To
take security measures to prevent loss of information form files by user error
or physical damages.
g. System
that will be easy to maintain and update.
h. A
system that will be flexible so as to adapt to changes, and prevent
unauthorized users form tampering with important files.
1.4 Scope of the study
The scope of electronic tax (E-tax) payment system is to use an
online or net based tax payment system to carry out some of the activities of
Board of Internal Revenue (BIR) that consumes time and that has been carried
out manually which some of them are:
a. Revenue
collection (all types of revenue).
b. Motor
vehicle license.
c. Change
of ownership.
d. Plate
numbers.
e. Registration
of vehicles
f. Capital
gains tax
g. stamp
duties
h. Pay-as-you-earn
(PAYE)
1.5 Significance of the Study
Advantageous process of electronic tax (E-tax) payment system is to
make sure that the duties of the system under study, Board of Internal Revenue
(BIR) is been carried out diligently and also to reduce the rate of manual
method and time consuming. Automation of a system that is net-based (online
system) for tax payers will be introduced to save time and also ensure accuracy
processing.
1.6 Definition of Terms
Adjusted profit: - This refers to that part of the company’s profit which is arrived at
after adjusting for allowable and non-allowable income and expenses.
Assessable income: - This is the actual income relating to the tax year of assessment.
Budget surplus: - Here
government revenue is expected to be more than the expenditure.
Direct taxes: - This is a government
compulsory levy on the person intended to pay tax.
Earned income: - This refers to income derived form a trade, business, profession,
vocation and employment carried on or exercised by an individual.
Indirect taxes: - This is levied on a particular person who pays it but later recoups
(regains) this from members of the community, probably in most cases from his
customers.
Pay as you earn (PAYE): - Every employer is required to deduct the tax from the emoluments
paid or payable (by the employer) to the employees.
Relevant tax authority: - This is the tax office to which taxes and levies are paid.
Residence: - A person is deemed to be resident where he has a permanent place of
abode.
Taxation: - This is a payment levied by government for which no good or
services is received directly in return i.e. the amount of tax people pay is
not related directly to the benefit people obtain form the provision of a
particular goods or service.
Tax avoidance: - This means using
loopholes to bring down the law of tax payment.
Tax due: - Willingly refusal to
pay tax by an individual qualified to pay tax.
Taxable income: - This is the amount arrived at after applying the ruling tax rate on
the taxable income profit.
PROJECT CODE: 00002
PROJECT CODE: 00002