The Impact of Information and Communication Technology on Company Income Tax Collection in Nigeria




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De Montfort University


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Peer reviewed


The Nigerian economy is heavily dependent on oil as 80% of its revenue currently comes from this sector. However, tax revenue has never played a strong role in the country's management of fiscal policy and this is an issue of fundamental importance for development. Tax revenue is a predictable and sustainable source of income particularly given the high number of corporations operating in the country, some of which are multinational. Company Income Tax (CIT) can be a good source of government revenue, while also promoting economic growth, investment and the creation of job opportunities. Nigeria, like many developing countries, lacks an efficient tax collection system leaving a high proportion of company income tax uncollected as a result of avoidable leakages and corruption. The efficiency and effectiveness of company income tax collection depend on the medium of collection, and could be enhanced using Information and Communications Technology (ICT) as a driver, as is currently the case in developed countries.

Within the context of ICT integration in the public sector (e-government), this thesis identifies the impact of ICT on the collection of company income tax in Nigeria. Using the Technology Acceptance Model and the Theory of Planned Behaviour as the study’s underpinning frameworks, this research adopted a mixed method approach and collected data through 230 returned questionnairesand 4 in-depth semi-structured interviews. The data was entered and analysed in the Statistical Package for Social Scientists (SPSS) programme (version 21) using non-linear Regression (correlation) for Propositions 1- 4 and multinomial regression for proposition 5. The study found that the level of effectiveness of revenue collection realized increased as a result of use of ICT in company income tax collection. This is due to the elimination of leakages and human error, and protection of revenue by transferring all payments to the Central Bank of Nigeria.

The study also found that company income tax revenue increased in 2007 from N332billion to N846.6billion in 2012, and that the Federal Inland Revenue Service surpassed its 2014 target by N400 billion or 9.32 per cent, generating about N4.69 trillion. Of this, N1.18 trillion was collected from company income tax in 2014, compared to the N1.03trillion in 2013, based on a quarterly revenue report released in Abuja and reported by Customs Today on 31 January 2015. It found that the use of ICT in CIT collection has improved transparency; taxpayers pay into the designated banks online and obtain a receipt immediately. The Federal Inland Revenue Service’s software monitors the entire process and traces payments to ensure accuracy; the banks then transfer the money to the Central Bank of Nigeria. The e-tax payment system was found to give the federal government a real time, almost minute by minute, report on taxes paid by taxpayers and receipted by the Federal Inland Revenue Service.

The findings revealed that ICT also has the potential to improve interactions between the tax authority and taxpayers, fostering transparency and accountability in the administration of company income tax collections. This study also found that information disseminates from the tax authority to company income taxpayers through radio and websites, publication and information requests submitted by the taxpayers and queries answered by tax officials. The results obtained indicated that using ICT facilitates the CIT collection process and predicted potential contribution to the effectiveness and efficiency in CIT collection in terms of the skills, opportunities and resources required.

This study has contributed to the limited body of work in this area and employed an extended version of the much studied Technology Acceptance Model (TAM) in order to produce insights into the impact of ICT on company income tax collection in Nigeria. The study model postulates that the adoption of ICT in CIT collection is determined by perceived usefulness and perceived ease of use, attitude, intention to use and accessibility in terms of affordability and infrastructure. There are obvious restrictions of time and inadequate funds as with other doctoral research works. This study was limited to the impact of ICT on company income tax collection, but other directions for future research are the impact of ICT on collection of other taxes such as petroleum profit tax collection in Nigeria.





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