Abstract

This research work is title “The impact of Information Technology on Tax Administration”. In respect of the research findings, the study recommends that: filing of tax online should be monitored and controlled because of its adverse effect on planning and implementation of tax collectivity; respective agencies (federal, state and local government) responsible for tax collection should sensitize eligible and potential tax payers on the process and suitability of online tax registration by tax payers in other to enhance its impact on tax administration in the country;online tax remittance should be encourage among tax payers because it enhance flexibility in tax collection, but it must be controlled with manual remittance due to its inverse impact on planning and implementation of tax administration; anda replica of the study should be carried out in other parts of the country in other to re-validate and test the applicability of the findings in them.

CHAPTER ONE

INTRODUCTION

1.1 Background To The Study

Introduction he use of automated systems has been proven to be capable of introducing massive efficiencies to business processes at a minimal cost (Wasao, 2014), due to the bureaucratic structure of government which is costly to manage with little or no result, tax authorities as an agency of government are turning to e-government led solutions like electronic tax filing (e-filing) (Amabali, 2009), based on the arguments that it enhances the delivery of public services and fiscal profundity without incurring costly recurring overheads (Harrison & Nahashon, 2015).

United Nations (2007) stated that e-taxation is a process where tax documents or tax returns are submitted through the internet, usually without the need to submit any paper return; it encompasses the use of internet technology, the World Wide Web and Software for a wide range of tax administration and compliance purposes.

Electronic tax filing was first coined in United States, where her Internal Revenue Services (IRS) began offering tax return e-filing for tax refunds only (Muita, 2011). This has now grown to the level that currently approximately one out of every five individual taxpayers is now filing electronically.

This however, has been as a result of numerous enhancements and features being added to the program over the years. Today, electronic filing has been extended to other developed countries like Australia, Canada, Italy United Kingdom, Chile, Ireland, Germany, France, Netherlands, Finland, Sweden, Switzerland, Norway, Singapore, Brazil, Mexico, India, China, Thailand, Malaysia and Turkey (Ramayah, Ramoo & Amlus, 2006). Nigeria and other developing countries such as Uganda, Rwanda and Kenya have also embraced electronic filing of tax returns (Muita, 2011).

Dowe (2008) disclosed that tax authorities around the world are using electronic tax administration systems to interact with taxpaying public in tax collection, administration and compliance settings so as to improve effectiveness and efficiency in tax administration. Globally, previous studies on the suitability of information technology complied tax system have it that; a positive impact of automation system usage and the cost of tax administration, automation and effectiveness of revenue collection of Ghana Revenue Authority using a case study of customs division (Gidisu, 2012).

Wasilewski cited in Muthama (2013) with focus on the economic development and taxation system by comparing the case of Brazil and Japan. Japan’s experience demonstrated that a country does not need to postpone a real change in the tax structure until it achieves a high stage of development, while in Brazil; low-income taxpayers bear most of the tax burden.

Gasteiger (2011) indicated that automated system enhances administration with the provision of multiple scenarios that allow senior management in a multi-campus university system to generate multiple income scenarios, make well-informed decisions concerning the operation of their institution and timely calculation and allocation of resources to academic departments.

In Kenya, Kioko (2012) indicated that the macro model performs better the variations in funds allocated to counties than the representative tax system, Kibe (2011) disclosed that planning for revenue collection can best be carried out by a system that combined spatial and attribute data management capabilities like geographical information systems, Harrison & Nahashon (2015) with focus on small tax payers revealed that online tax system does affect tax compliance level, while Otieno, Oginda, Obura, Aila, Ojera &Siringi (2013) stated that relationship existed between information systems and revenue collection efficiency and effectiveness and more so, there is a strong positive relationship between Internal Control Systems and revenue collection.

1.2 Statement Of Problem

In respect of the above, none of the studies had so far been carried out to investigate information technology, in terms of online tax filing, online tax registration and online tax remittance on the level of tax administration in terms of tax productivity, planning and implementation, which depicts existence of gap in literature. Although,Harrison &Nahashon (2015)studied the effects of online tax system in terms of Online Tax Filing, Online Tax Registration and Online Tax Remittance, but it was based on tax compliance. Therefore, this study examines the impact of information technology on tax administration with interest on Cameroon..

1.3 Research Questions

The researcher seeks to answer the following questions which can be categorized under general questions and a set of specific questions.

1.3.1 General Research Question

The general question is to what extent does information technology impact tax administration?

1.3.2 Specific Research Questions

1. What is tax administration?
2. What is information technology?
3. What is the effect of information technology on tax productivity and the relationship between information technology on tax implementation and tax planning?

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