DESIGN AND IMPLEMENTATION OF AUTOMATED TAX MANAGEMENT SYSTEM IN BOARD OF INTERNAL REVENUE

1.1 Introduction

Tax management provides freeform creation of Tax controls that will be applies to orders. Access Tax management, the Tax management link in the administration link list. Any number of Tax controls can be created. Each Tax control has conditions and charges. Tax management system is used to detect and maintain Tax database of previous years. Track and manage new construction information including Issuing refunds and display Tax payer refund information. This work targets the monitoring, managing and organizing of individuals, partners and company Tax payment and maximizes the security for the organization or corporate body. Tax is a common source of income generation for financing government activities. Individuals and organizations are expected to fulfill their obligations on tax payment as required by law to give the government the financial power, amongst other purposes of taxation. Effective taxation therefore becomes important as it is a source of required financial power for a government to rule its territory. There are two forms of taxation common to most countries, direct taxes to be paid by the tax payer on his income, profit or asset owned. The other form, indirect taxes is imposed on commodities before they get to the consumer, and are to be paid by the consumer not as taxes but as a part of the selling price per unit of the commodity (Money Control, 2013).

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Limitations of the Study and Definition of technical terms.

1.2 Background of Study

Governments are as diverse as the people and cultures they serve. But when it comes to keeping a government running through efficient assessment and collection of taxes, they all face the same basic challenges. Whether you're a county on Florida's Gold Coast or a republic in Africa emerging from strife and putting comprehensive tax procedures in place for the first time, it all comes down to fair and transparent assessment and valuation of property; efficient, effective billing and collection procedures; and absolute transparency with your most important constituents - the public.

Most company now uses computerized payroll system. A computerized payroll system will not only resolve difficult problem but also it will provide fast process and accurate calculation of the salary. According to Dave Rooses (2010) in his article on how payroll system works. In manual payroll system there is so many possible errors that may be encounter but if the payroll is computerized, payroll clerks will not need calculator to compute the salary of the employee. Payroll is the sum of all financial records of salaries for an employee, wages, bonus and deductions. In accounting, payroll refers to the amount paid to employee for services they provided during a certain period of time (Wiki podia 2005). The employer are required to hold back the part of each employee's earnings because the money will used for paying the income taxes union dues and medical insurance premiums that is responsible of the employee.

According to a world bank economic report on Nigeria published on the 1st of May 2013, it was stated that 95% of the government's budgeted expenditure depended on its projected oil revenue based on current world oil prices. It was also recommended in the report that the Federal Government, through the improvement of the domestic tax system it can increase its internal revenue and provide in the event of a fall in oil prices a financial backup plan for the economy (The World Bank, 2013).

A computerized payroll system will not only provide accurate calculation and fast process of payroll transaction but it will secure data through security implementation and accordingly arrange files provided by a well designed database that will produce a paperless environment. The aim of the e-taxation system is to provide the tax authority a database with details of taxpayers and their transactions. This would reduce the issue of tax evasion and hence an increase in government tax revenue. It would also allow taxpayers process their transactions online without having to visit the office of the FIRS, reducing the workload on the resources available to the FIRS and which consequently give room for the re-allocation of freed-up resources. The objectives considered during the development of the e-taxation system include: Creation and management an effective and efficient database to provide tax payers records, information/bio-data for easy referencing.

The provision of an alternative payment routes for tax payers so as to encourage immediate tax payment and provide relief to those who find it an easier and more efficient payment route. Which will be achieved by creating a web based system in which registered entities log-in and make payment. The e-taxation system is to be developed for use by the tax authority at the federal level for tax payment, record keeping and educational/awareness programs in under-developed and developing countries with specific focus on the African continent.

Gboko local government education authority is a government establishment under the supervision of Benue state universal basic education board (BENUE SUBEB). The LGEA is to carter for the needs of universal primary education at the local level. The need for the efficient management of the staff warfare and the and emoluments that are accrue to the staff from the state government as in the monthly salaries, wages, and other benefits received from the work done on a monthly basis, the LGEA have a duty to prepare the payroll of his/her staff to the state headquarters of SUBEB for approval and document and pay details of individual staff is entered manually using biro, pencil and duplicating papers for making of duplicate copies.

1.3 Statement of Problem

Investigation revealed that due to the manual process of collection of Tax and proper recording of records, the government fails to collect the appropriate Tax from the people, body, and cooperation also from business firms that are due for Tax payment. The government cannot access all the location to collect Tax from them. Also because of inconsistency in the process, the actually Tax payment might not be calculated effectively from this bodies. Therefore, making the government loss so much in the revenue generation from the tax income service.

Tax collection is an important function of the Federal Inland Revenue Service. However, there are some teething problems that inhibit effective and efficient collection system. They are as follows:

1. Inadequate government regulation on collection system
2. Lack of total commitment and adequate Tax policies.
3. Lack of transparency on the part of the Tax administrators.
4. Frauds committed by both F.R.S staff and collecting agents.
5. Delay in remitting Taxes collected and in some cases outright diversion of Taxes collected.
6. Lacking adequate remuneration for collection staff of F.R.S.
7. Lack of functional equipments to detect frauds.
8. Lack of proper monitoring
9. Lack of shift penalty for erring.
10. There is no proper accountability of the amount collected by various agents by the government and this brings about apathy among the Tax payers.

1.4 Aim and Objectives of the Study

The aim of the study is to design and implement an Automated Tax Management System in Board of Internal Revenue. In achieving this aim, the following specific objectives were laid out as follows to develop an application software that will:

1. Create a well-arranged database and to implement strong security of the system for data security;
2. Provide registration, payment processing and tax filing facility for individuals and businesses;
3. Minimize the effort of the book keeper in processing the payroll slip and payroll form;
4. Provide electronic interfaces with the Gboko LGEA and the Companies and Intellectual Property Commission (CIPC);
5. Make an efficient and accurate computation of Tax payment due; and
6. Provide Customs management system for its import, export and cross border activities;
7. Provide for individuals and corporate bodies to request for their Tax Clearance Certificate (TCC) online.

1.5 Significance of Study

The proposed system will help the internal revenue commission board and the LGEA especially for Tax collection and management. It will help to lessen the time and effort of the board in moving around and collecting Tax. The system develop can accommodate changing features and produce a paperless environment through 2well design database.

This study will help the proponents to enhance the ability on how to create an understandable computerized system in an easy way. This will serve to the proponents as a challenge to do a better system.

1.6 Scope of Study

The scope of the research is focused on the Design and Implementation of Automated Tax Management System in Board of Internal Revenue.

1.7 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this project work. There were lots of information needed from the staffs of this institution to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
3. Research material: availability of research material is a major setback to the scope of the study.
4. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
5. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet).

1.8 Definition of Terms

Balancing Allowances: Where in any accounting period of a company, the company owing any asset in respect of which it has incurred qualifying expenditure wholly and exclusively for the purposes of operations carried on by it, disposes of that asset an allowance shall be due to that company for that accountancy period of the excess of the residue of that expenditure of the date such asset is disposed of was the value of that asset of that date.

Demand Note: It is a notice asking a Tax payer to pay after interest and penalty might have been computed.

Real Time: Occurring immediately, this is used for such task as navigation, in which the computer must react to a steady flow of new information without interruption.

Withholding Tax: An advance payment of income Tax withhold for the purpose of bringing prospective Tax payers into the net.

Offshore Company: A company doing business in Nigeria, deriving income from it but not resident in Nigeria.

Tax Refund: Tax refund has been defined as money given to a Tax payer if he/she has paid more Taxes than he/she ought to have paid in a given assessment.

Tax Authorities: Tax authorities are any government entity Oran organization with official responsibility for collecting Taxes and levies.