PROCEDURE AND PROBLEMS OF COMPANY INCOME TAX IMPLEMENTATION AND ADMINISTRATION IN NIGERIA USING THE FEDERAL BOARD OF INLAND AS A CASE STUDY

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

The primary function of the government or any modern societies includes offering protection to its citizens. To provide social amenities and create condition for economy well being of the society surely the discharge of this responsibility requires funding, and one of the way by which government generates fund is through taxation.
A tax can be defined as all compulsory sum levied by a government and or its accredited either as individual or organization or on goods and services. Irrespective of any corresponding returns of services or goods by the government. In other words, the tax payer does not receive benefit according to the proportion of tax paid, rising of funds is not the only objectives of taxation.
Other objectives include:
To regulate and control the consumption of certain commodities.
To control monopoly.
To control business and commerce.
To maintain the nations balance of payment.
To allocate resources etc.
A tax can be classified into two categories. Namely:
a) Direct Tax: these are taxes imposed on the income of individual and business firms, examples are personal income tax, petroleum profit tax, capital gain tax etc.
b) Indirect Tax: These are taxes imposed on goods and services. Examples are; stamp, custom duties and exit duties, value added tax entertainment etc.
However, our area of interest in this course of study is company.
Income tax, which is a form of direct tax, company income tax is a tax imposed on income and profit of corporate bodies, the assessment of which is governed by the Companies Income Tax Act (CITA) of 1979 as amended. The administration of company taxation is vested in the Federal Board of Inland Revenue.
Federal Board of Inland Revenue was first established under section 3 of the act.
The income tax administration ordinance of 1958 and has been amended as needs arise presently, the composition of the board as spelt out by degree No. 3, 1993 has the following provisions.
There shall continue to be a board of which the officials name shall be the federal board of Inland Revenue. There in after in this act referred to as the services.

STATEMENT OF THE PROBLEM
Tax implementation and administration had often not been accorded, the required attention quite often attention has been focused on the widening of the tax basin or the introduction of new taxes very rarely do we hear of any concerted effort aimed at improving the administration of tax system as supposed to reform the substantive rules. There is no gain saying to the fact that tax implementation and administration in Nigeria today has not succeeded in achieving the goals of revenue adequacy and equity. Given if we apply the good old test of equity certainty, convenience and administration efficiency, Nigeria will score less than a pass mark. The subject of taxation and its operation have several questions as follows:
The problem of taxation or disclaiming of allowance on income, such as non-existing property, so as to have a generous capital allowance.
Whether there is an efficient means of collecting tax from tax payers, this has until how resulted in reluntance on the part of the tax payers which has lead to a lot of discrepancies.