Design And Implementation Of A Computerized Tax Collection And Management System

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Design And Implementation Of A Computerized Tax Collection And Management System


Tax is any form charge levied on a person or an institution by a governing body or its equivalent such that defaulted payment is punishable by law. The imposition of taxes and the institution of taxing is as old as civilization itself cutting across religion, race and continental borders.

Prompt tax payment and reduced tax evasion is always a primary objective of the government in most civilizations that exist today. The issue of tax evasion has proven to be a difficult practice to curb even in nations with a proper database of its citizenry and the current mode of tax payment is redundant and hectic as ascertained through a survey of our case study. Some of the challenges governmental bodies have to overcome in order to encourage the prompt payment of taxes and effectively reduce evasion includes, developing convenient payment methods and having proper records keeping systems.

This research work is a concise summary of how the continuous development of computing science and its wide spread ability to be deployed to solve a wide range of problems can be geared towards the development of an electronic taxation system to assist government bodies with convenient tax collection and record keeping. The waterfall methodology was selected for system development. Goals to be achieved by the system are instant access, improved productivity through efficient utilization of resources, database creation and records management, simplification of operations, reduced processing time, user friendliness, portability and flexibility for further enhancement. The E-taxation is not a new system, but a rather local solution to a problem with global purview. This system looks at how tax payment can be encouraged through simplification and increased efficiency in payment processing.

Chapter One

1.0 Introduction

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). Tax is a charge imposed by a government on persons, entities or property, administered to generate revenue for that government (Black, 1999). 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).

The Nigerian tax system is surrounded by countless problems which include: Little data available on the history of tax revenues or tax payers due to a lack of proper records keeping system (Federal Republic of Nigeria, 1997). A lack of comprehensive tax statistics and a centralized database for the existing ones (Federal Republic of Nigeria, 2002).

Deployment of limited man power and other necessary resources into redundant roles and job functions (Ariyo, 1997). Duplication of taxes and its negative effect on tax payers a problem resulting from a clash in the governments’ fiscal responsibility and its fiscal power (Odusola, 2002). Deliberate attempts by tax payers to evade taxes (Odusola, 2003). 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 availability of an alert system that to notify the regulatory body of outstanding payment by registered entities and workers.

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.

1.1 Background of the 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.

Breakdowns at any point in the system can lead to lower revenue, confusion and perceptions of unfairness. Yet revenue departments face serious internal pressures, since they are often compelled to get the most out of aging or outdated software and hardware systems. It’s the classic chicken-and-egg scenario: You need the best tools in order to get better at managing and collecting taxes. At the same time, how can you afford improved technology without the collecting the appropriate revenue?

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 work. 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. (Wikipodia 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. (Fundamental financial and managerial accounting concepts published by mc grave-hill international edition).

Payroll processing is actually a special- case purchases system in which the organization purchases labor rather than raw materials or finish goods for resale. (Accounting information system by James A. hall 2006),the proponents will propose a system that is entitled computerized payroll system. It will save time, produce faster result and will lessen the errors.

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.

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.

1.2 Statement of the Problems

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.

1.3 Objectives of the Study

This study is intended to design and develop a computerized e-tax system, a system that will allow all this bodies to pay their Tax from their location and pay consistently.

Specifically, other objective of this system is to develop a system that will provide:

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

1.4 Significance of the 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.

1.5 Scope and Limitation

1.5.1 Scope

This study is designed to develop and implement a computerized payroll system which will be called an e-Taxation system for BIRDS and Gboko LGEA, it cover the process of preparing and collecting of Tax from employee, cooperation and business firm and management of this records

1.5.2 Limitation

The proposed computerized payroll system for BIRDS and the Gboko LGEA does not support offline program. It only uses the internet or the wireless Area network (WAN) for its operation.

Other limitations are as follows:

  1. Lack of fund to sponsor the research and implementation of the at the initial time.
  2. Inadequacies of professional programmers who should have been used as reference point at the design stage through the implementation stages.

1.6 Dfinition of Terms:


Management and business study (1978), defined a computer as an electronic device that is capable of imputing and outputting stored in the computer system.


List of employees and all their and salaries including their allowance and deductions


This is usually a monthly payment for regular employment that on his / her work done.

Shift Allowance:

This allowance paid to worker or shift basic.


This represents the accumulation of staff entitlement.

Rent Subsidy:

These represent the rent given to an employee for his or rent age. This is the allowance granted to an employee who it s a pictorial represent of information in data processing means of symbols.

Transport Allowance:

This is allowance given to a staff for his transportation to work.


Structure query language a database payment language.


local Area network.


Tax is a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state to fund various public expenditures. A failure to pay, or evasion of or resistance to taxation, is usually punishable by law. Taxes consist of direct or indirect taxes and may be paid in money or as its labour equivalent. Some countries impose almost no taxation at all, or a very low tax rate for a certain area of taxation

Chapter Five

Summary, Recommendation and Conclusion

5.1 Summary

The E-Taxation system offers multiple solutions to both sides of the taxation system. The tax collector’s job is more effectively carried out as access to data required to determine the volume of taxes currently paid is readily available and can confidently estimate deficits. The tax organization is seen as more transparent and effective in carrying out its duties as it has records to support stated facts in its report. The tax payers in general are more receptive to taxation as the whole process is convenient and flexible. It doesn’t require visits to the tax office. Even the government as a whole would benefit from the implementation of this system as it would have the ability to properly prepare its budget based on expected income, since it has historical records and a database showing payments trends. The system can also be used by the government to measure the level of the public’s reception of changes in tax laws, rates and their responses to the changes.

5.2 Recommendations

The system meets desired expectations but would perform better if the following recommendations and suggestions are considered:

  1. The software is designed to accommodate the needs of its scope of study and as such implementation outside this scope could be limited. But bearing in mind possible implementation outside the defined scope of study, it was developed using Object Oriented Programming concepts and as such can easily be modified to accommodate the needs of implementation environment.
  2. The E-taxation system can also be interfaced with other governmental agencies and institution to furnish them with information that wouldn’t necessarily be available to them.
  3. The E-taxation system should be implemented in a secured server environment as it contains several important information about its users.
  4. The E-taxation system can also be used by the government provide more accurate estimates about the income pattern of its citizens and their response to the implementation of new tax policies.

5.3 Future Research

The software can be enhanced further to include multiple modules as its initial development system is in view of the future, for example its database can be interfaced with the database of other governmental institutions and they can have access to the information it provides. It can be employed for the purpose of research. Also it’s important to keep abreast of the latest software and network security protocol so as to properly secure the information of users. Biometric means of system access would also be highly beneficial as it would increase the user convenience.

5.4 Conclusion

The E-taxation is not a new system, but a rather local solution to a problem with global purview. This system looks at how tax payment can be encouraged through simplification and increased efficiency in payment processing. Individuals can depend on this platform to carry out their duties as citizens.

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