Abstract

 The study adopted survey research design, where both primary and secondary data were used. The primary source of data were questionnaires and interviews while secondary data was obtained from past works and Handbook. Quantitative data was presented using frequency counts and percentages, while correlation and regression was used to test the hypotheses.  Data generated through interview was analyzed qualitatively.

The study established that the level of utilization of computerization is not high but moderate in divisional taxation centreBuea and Limbe, southwest. The study also revealed that computers are not adequate for staffs of the tax centres.

From findings of the study, we therefore concluded that computerisation has enhanced performance in revenue collection by reducing human error and processing times, providing readily accessible data for tax officers and facilitating better decision making by tax authorities. Hence the study recommended among others that the government should ensure an increase in computers to the staff. The study revealed that computerization of tax administration significantly affects revenue collection

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study 

One of the ways the government generates revenue is through taxation.  Taxation is a system used to raise money for the purpose of government by means of contributions by individual persons or corporate bodies. Taxation is a fiscal measure used to reduce inequalities of wealth in the society and a mechanism for the provision of needed revenue for socio-economic development (Aguda 1999). The economist sees it as a tool for macroeconomic policy and revenue generation to finance government deficit.

It is believe that the magnitude of government surplus or deficit is the major statistical measure of the impact of government fiscal policy on an economy (Siegel 1979). Fiscal deficit has become a recurring feature of public sector financing all over the world. Tax administration therefore involves all the principles and strategies adopted by any government in order to plan, impose, collect, account, control and coordinate the process of taxation (Ogbonna 2010). Computerisation system is the application of the computer-based software used to input, process, store, and output information.

A computerized tax system therefore involves the computerisation of tax information systems, which is established in order to increase productivity. Productivity is the efficient utilisation of resources in the manufacturing of goods and services. So productivity can be more correctly stated as the relationship between achieving a result and the time it takes to accomplish it. The electronic tax filing was first introduced in the 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).Again, Governments and organizations worldwide are increasingly recognizing the need to facilitate access to public services through information exchange using computerisation.

The role ofcomputerisation has been growing in the economic and social life in the 21st century. The above underscores the need for this study on the contribution of computer technology to productivity improvement in the public sector in Africa. The objective therefore is to investigate the impact of computerisation on the billing process (i.e. in bills invoiced per month) in two state utility corporations in Botswana – the Botswana Power Corporation (BPC) and the Water Utilities Corporation (WUC). This study investigates the impact of computerisation on productivity by examining the input-output relationship with computer technology as one of the inputs.

The rest of the paper is structured in eight sections, as follows. The first section is the introduction. The second section provides brief information about the Corporations under study It is now a fact as evidenced by developments from many countries that computerisation as a sector can contribute greatly to the national GDP of a nation and acting as an enabler, can result in improved market competitiveness of a nations products and services (Uvaneswaran & Mellese,2016).  Computerisation can impact positively on governance and other sectors of the economy. It can effectively assist international economic integration, improve living standards, narrow the digital divide and improve biodiversity utilization and management.

According to Adamou (2001), computerisation has become very important to national growth and development. The adoption of computerisation requires a business environment encouraging open competition, trust and security, interoperability and standardization and financial resources (Uvaneswaran&Mellese,2016). This requires the implementation of sustainable measures to improve access to the Internet and telecommunications infrastructure and increase ICT literacy, as well as development of local Internet-based content. Thus, computerisation has been employed in many sectors of the Cameroon economy such as pensions, land registry, security administration, public financial management and tax administration.

Computerization saves time on transaction hence leading to quality of financial reporting for instance timely, accurate and reliable information can be generated (Lewis, 1999). The importance of computers is the ability to handle vast amount of information and to do other processes with accuracy and speed which cannot be manually undertaken have been recognized and appreciated by the large enterprise and government institutions computerisation involves sending and receiving messages through electronic devices such as web portals, internet, inters witch, telnet and telecommunication.

The recent globalization of computerisation has made business organizations, companies, individuals and government parastatals change from the manual way of communication to electronic means. With the advent of computerisation, it became imperative for tax administrators to take advantage of the emerging capabilities created by computerisation to enhance tax administration to increase productivity.

However, In order for technology to be adopted successfully in an organization, any E-government initiative must ensure that it has sufficient resources, adequate infrastructure, management support, capable Information Technology (IT) staff and effective IT training and support. In Nigeria, Oseni (2015) concluded that there is no hiding place  for  tax  evaders  with  the  use  of  this  modern  technology  since all  potential taxpayers are captured by the system.

Therefore, for the implementation of computerisation to enhance efficiency in tax administration, it involves changes at different levels such as adequate availability of ICT infrastructures, ICT capacity or skills and ICT utilization by corporate taxpayers. 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.

Computerisation of tax payer’srecords is still incomplete there is a need to access third party sources of information, such as withholdings, bank transactions, foreign exchange transactions, transactions in securities and large transactions (involving real estate, cars, tax-deductible transactions, customs payments). Use of tax amnesties can prove useful.

Improvement of revenue collection in south west, Cameroon is the key to meeting their financial obligations leading to realization of their mandate to offer quality and timely services to the residents, the demand for which may exceed the available resources. Many countries have adequate revenue bases to finance the current level of services, but revenue collection levels are often low. Revenue in form of taxation, excise duties, customs, licenses or other sources is very crucial in ensuring smooth execution of government operations.

Taxation is one of the leading avenues of revenue collection by governments all over the world. It is asserted that, developed countries have advanced and successful tax policies which enhance revenue collection. Nevertheless, developing countries often have inefficient tax systems which hamper their tax collection efforts (Kayaga, 2007).

1.2 Problem Statement

The tax centres is charged primarily with the responsibility of accessing, collecting and accounting for the various taxes to the government of Cameroon.  Over the years, tax administration in tax centres has been plagued with several limiting factors such as weak administrative lapses and administrative facilities like the evidence of a manually compiled database of tax payers. Manual compilation involves the use of files/ folders for data storage.

When records are stored in this manner over a long period of time, retrieval of such records may prove to be very difficult and this results in situations such as tax evasion, tax avoidance, lack of adequate tax payers records, corruption and mismanagement on the part of the tax officials, inability to identify all taxable persons and lack of effective mechanism in place to prosecute cases of tax evasion.

Tax avoidance is a legal procedure that must be undertaken in order to reduce the tax obligations of an individual or groups of individuals or organisations by so doing, tax officials often abuse their position by creating self-system in order to reduce the tax obligations in return of bribes this affects revenue generation. tax evasion is an illegal way of reducing the tax burden suffered by an individual taxpayer and it is punishable by law.

As a result of the use of manual system of tax administration retrieval of taxpayers records becomes difficult taxpayers use the opportunity to evade tax by under reporting turnover or over reporting expenditures with or without the involvement of tax officials.in other words tax evasion often entails taxpayers deliberately misrepresenting the true states of their affairs to tax authorities to reduce their tax liability and includes dishonest tax reporting this affects revenue collection.

Corruption can be seen in two ways, firstly collusion between tax officials and taxpayers as tax officials can abuse their position to issue tax exemptions, apply low rates unregister individuals from the registers in exchange for share of the money saved and the second case is where tax officials themselves practice corruption without any direct tax payer involvement.

Tax officials can extort bribes from taxpayers by threatening them to pay above rates or steal the tax revenue collected all of these is as a result of poor tax administration. In addition, the use of manual system of tax administration makes retrieval of past tax payers records such as their location, their activities carried out, bank statement and their names difficult there by resulting to inability to identify all taxable persons, this situations affects tax revenue collection. In spite of the adoption of computerisation as an institutional measure in tax administration, the problem of poor tax administration still persists.

In tax centres, Cameroon, corporate tax collectors have not fully embraced the use of computerisation for tax administration. The fundamental question is that, has the application of computerisation enhanced revenue collection of tax administration in tax centres? This is the central problem which the research intends to investigate.

1.3 Research Questions

1. Do tax collectors make use of the computerised system in tax administration?
2. What is the relationship between computerised tax administration and revenue collection?
3. What are the problems associated with tax administration in Cameroon?
   • Research Objectives

1.4.1 The main Objective

The main objective is to examine the effect of computerised tax administration on tax revenue.

• Specific objectives include

1. To find out whether tax collectors make use of the computerised system of tax administration.
2. To establish the relationship between computerised tax administration and revenue collection.
3. To identify the problems associated with tax administration.

1.5 Research Hypothesis

H1:  There is no relationship between computerised tax administration and revenue collection.

Ho:  There is a relationship between computerised tax administration and revenue collection.