Compturised Tax System and Revenue Mobilzation
CHAPTER ONE
INTRODUCTION 1.1 Background of Study.
Every sovereign State possesses a prerogative to impose taxes, duties, fees and other charges to perform its basic functions (Contact; 2007). By this, Tax administrations can mobilize financial resources in order to secure the provision of public services such as education, infrastructure, health services, or social protection. This is to say that revenue administrations occupy a pivotal position in the mobilization of domestic financial resources (Contact; 2007). But over the years, many developing countries lack an efficient tax collection system, leaving in some cases more than 60% of the tax potential untapped. In these countries, sustainable development and fiscal independence can only be achieved through an improvement of taxation processes (Napierala & Kiefer; 2009). According to Miyahira (2008), the technological innovation has been an important matter in tax and revenue collection. The advent of new instruments to help businesses work more efficiently affects the way taxes and revenues are collected. Information Technology (IT) changes at a rapid pace that the existing fiscal systems become obsolete in a short period of time. The necessity to integrate former existing structures is becoming more demanding since new applications need to be created to assist the dynamics of financial processes. In addition, the quantity of processing data augments each year, which requires a scalable infrastructure to keep the fiscal processes working. With the introduction of Information and Communication Technologies (ICT) in revenue administrations, efficiency and transparency will be enhanced, contributing to the -1-
improvement in tax assessment and collection systems for the attainment of national growth and development. The researcher will provide some evidence based on the examples of a computerized integrated tax administration system that was developed in some countries and how it has helped to improve the
INTRODUCTION 1.1 Background of Study.
Every sovereign State possesses a prerogative to impose taxes, duties, fees and other charges to perform its basic functions (Contact; 2007). By this, Tax administrations can mobilize financial resources in order to secure the provision of public services such as education, infrastructure, health services, or social protection. This is to say that revenue administrations occupy a pivotal position in the mobilization of domestic financial resources (Contact; 2007). But over the years, many developing countries lack an efficient tax collection system, leaving in some cases more than 60% of the tax potential untapped. In these countries, sustainable development and fiscal independence can only be achieved through an improvement of taxation processes (Napierala & Kiefer; 2009). According to Miyahira (2008), the technological innovation has been an important matter in tax and revenue collection. The advent of new instruments to help businesses work more efficiently affects the way taxes and revenues are collected. Information Technology (IT) changes at a rapid pace that the existing fiscal systems become obsolete in a short period of time. The necessity to integrate former existing structures is becoming more demanding since new applications need to be created to assist the dynamics of financial processes. In addition, the quantity of processing data augments each year, which requires a scalable infrastructure to keep the fiscal processes working. With the introduction of Information and Communication Technologies (ICT) in revenue administrations, efficiency and transparency will be enhanced, contributing to the -1-
improvement in tax assessment and collection systems for the attainment of national growth and development. The researcher will provide some evidence based on the examples of a computerized integrated tax administration system that was developed in some countries and how it has helped to improve the