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TITLE PAGE

THE IMPACT OF TECHNOLOGY ON TAXATION IN NIGERIA

A CASE STUDY OF FEDERAL INLAND REVENUE SERVICE

(FIRS) ENUGU

BY

JACOB EBELE COMFORT

REG NO: 2011/178321

BEING A PROJECT IN PARTIAL FULFULMENT OF THE

REQUIREMENT FOR THE AWARD OF BARCHELOR OF SCIENCE

(B.Sc.) IN ACCOUNTANCY

DEPARTMENT OF ACCOUNTANCY
FACULTY OF BUSINESS ADMINISTRATION
UNIVERSITY OF NIGERIA
ENUGU CAMPUS

AUGUST, 2015.
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DECLARATION

This is to declare that this project is an independent research written by

Jacob Ebele Comfort with registration number 2011/178321 and was duly

supervised by Mrs. Ezuwore-Obodoekwe, C. N. of the department of

Accountancy, University of Nigeria Enugu Campus.

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Jacob Ebele Comfort Date
(Researcher)
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APPROVAL

This is to certify that this project titled The impact of technology on

taxation in Nigeria (a case study of the Federal Inland Revenue Service)

was written by Jacob Ebele Comfort with registration number 2011/178321

submitted to the Department of Accountancy in partial fulfillment of the

requirement for the award of Bachelor of Science (B.Sc.) Degree in

Management.

----------------------- ---------------
Mrs. Ezuwore-Obodoekwe, C. N Date
(Supervisor)

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Assoc. Prof. Osita Aguolu Date
(Head of Department)

--------------------- ---------------
External Examiner Date
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DEDICATION

This work is dedicated to God almighty the giver of life, wisdom,

knowledge and understanding who has always seen me through the years

and to my lovely family.

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ACKNOWLEDGEMENTS

With sincerity in my heart, I would like to acknowledge all those who had

contributed to the accomplishment of this research.

My greatest gratitude goes to God almighty, who gave me life, wisdom and

grace to carry out this research work.

I would not fail to thank my project supervisor, Mrs. Ezuwore-Obodoekwe,

C. N. for her advice and intellectual guidance throughout the course of this

research.

My gratitude also goes to my head of department, Assoc. Prof. Osita Aguolu

and all the lecturers in the department of Accountancy who have impacted in

my academic life and other areas of life.

My profound gratitude goes to my parent for their love, care, advice, moral

and financial support.

My profound gratitude also goes to Mr. & Mrs. Ogidi for their love and

financial support.
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I want to appreciate my lovely siblings, Emma, Christy and Jerry, my friends

Hannah, Mary, Chisom, Oge, Edozie, Godfrey and my roommates you

people are the best and may God bless you really good.

Finally, my profound gratitude goes to all the authors who I cited in this

work and also to the staff of Federal Inland Revenue Service Enugu. I say a

big thank you to all.

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ABSTRACT

The study examines the effect of the application of technology in taxation in

Nigeria. In order to achieve the objective of this study, the following
hypotheses were formulated: technology has not enhanced the assessment
and collection of tax liabilities for individuals and corporate entities;
technology has not led to the increase of tax revenue; and technology has not
enhanced richer information between the taxpayers and tax authorities. The
research design employed for this study is the survey research design. Out of
a population of sixty staff of FIRS, fifty-two were selected as the sample
size using the Taro Yamanes sample tool. A questionnaire was designed
and distributed to elicit information from the sample population. The data
collected were analyzed using simple percentage. The chi square statistics
(X2) was used to test the hypotheses. It was observed that technology has
impacted positively on taxation in Nigeria. However measures to mitigates
fraud needs to be put in place.
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TABLE OF CONTENT

Contents pages

Title page - - - - - - - - - i

Declaration - - - - - -- - - - ii

Approval - - - - - - - - - iii

Dedication - - - - - - - - - iv

Acknowledgement - - - - - - - - v

Abstract - - - - - - - - - - vii

Table of content - - - - - - - - viii

List of table - - - - - - - - - xiii

CHAPTER ONE: INTRODUCTION

1.1 Background of Study - - - - - - 1

1.2 Statement of problems - - - - - - 3

1.3 Objective of study -- - - - - - - 4

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1.4 Research question - - - - - - - 4

1.5 Hypothesis formulation - - - - - - 5

1.6 Significance of the study - - - - - - 5

1.7 Scope and limitation of the study - - - - - 6

1.8 Definition of terms -- - - - - - 6

References - - - - - - - - - 9

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1 Concept of taxation - - - - - - - 10

2.1.1 Element and objective of taxation - - - - 12

2.1.2 Principles of a good tax system - - - - - 14

2.1.3 Categories of taxes in Nigeria - - - - - 16

2.2 Concept of technology - - - - - - 19

2.2.1 Brief history of technology - - - - - 19

2.3 Tax administration in Nigeria - - - - - 20

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2.3.1 Tax administration in Federal Inland Revenue Service - 23

2.3.2 Tax administration in State Internal Revenue Service - 27

2.3.4 Tax administration in Local Government Level - - 29

2.4 Technologies used for taxation in Nigeria - - - 30

2.4.1 Information and communication technology - - - 30

2.4.2 Application of ICT in taxation - - - - - 31

2.4.3 Taxpayer Identification Number - - - - - 33

2.4.4 Software Applications - - - - - - 34

2.4.5 Other Electronic system - - - - - - 36

2.5 The overview of taxation after the advent of technology in Nigeria -37

2.6 Positive impact of technology on taxation in Nigeria - - 40

2.7 Negative effect of technology on taxation in Nigeria - - 41

References - - - - - - - - - 43
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CHAPTER THREE: METHODOLOGY

3.1 Research design - - - - - - - 45

3.2 sources of data - - - - - - - 45

3.2.1 Primary data - - - - - - - 45

3.3 Population of research instrument - - - - 46

3.4 Sample size and sampling techniques - - - - 46

3.5 Method of data collection - - - - - - 48

3.6 Description of research instrument - - - - 49

3.7 Validation of research instrument - - - - 49

3.8 Method of data presentation and analysis - - - 50

References - - - - - - - - - 52

CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA

4.1 Presentation of data - - - - - - - 53

4.2 Analysis of data - - - - -- - - 69

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CHAPTER FIVE: SUMMARY OF FINDINGS,

RECOMMENDATION, CONCLUSION AND SUGGESTION FOR

FURTHER STUDY

5.1 Summary of findings - - - - - - 79

5.2 Conclusion - - - - - - - - 80

5.3 Recommendation - - - - - - - 80

5.4 Suggestion for further study - - - - - - 81

BIBLIOGRAPHY - - - - - - - - 82

APPENDIX:

Questionnaires - - - - - - - - 85

Vitae - - - - - - - - - 89
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LIST OF TABLES

Table 4.1: Questionnaire Distribution Table - - - 53

Table 4.1.1: Sex Distribution - - - - - - 54

Table 4.1.2: Age Distribution - - - - - - 55

Table 4.1.3: Martial Statues - - - - - - 56

Table 4.1.4: Level of Qualification - - - - - 57

Table 4.1.5: Section - - - - - - - 58

Table 4.1.6: Does FIRS use technology in tax administration? - 59

Table 4.1.7: Technology has enhanced the assessment and collection of tax

liabilities of individuals and corporate entities when compared with the

manual method. - - - - - - - 60

Table 4.1.8: Accuracy in the computation of individuals tax liability has

been achieved through the use of technology. -- - - 61

Table 4.1.9: The use of technology in your organization has led to accuracy

in the computation of tax liabilities of corporate entities. - - -62

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Table 4.1.10: The application of technology in the service has increased

revenue generation. - - - - - - 63

Table 4.1.11: Technology has helped in the reduction of tax evasion. -64

Table 4.1.12: There has been increase in the detection of individuals and

corporate entities involved in tax evasion as a result of the use of

technology. - - - - - - - - - 65

Table 4.1.13: Technology enhances richer information between taxpayers

and tax authorities. - - - - - - 66

Table 4.1.14: The use of technology minimizes the cost of information

dissemination in the Service. - - - - - 67

Table 4.1.15: The computerized method of disseminating information is

more effective than the manual method. - - - - 68

Table 4.2.1: Contingency table for hypothesis one - - 70

Table 4.2.2: Expected frequency table for hypothesis 1 - - 71

Table 4.2.3: Contingency table for hypothesis two - - 73

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Table 4.2.4: Expected frequency table for hypothesis 2 - - 74

Table 4.2.5: Contingency table for hypothesis three - - 76

Table 4.2.6: Expected frequency table for hypothesis 3 - - 77