Abstract

The study focused on evaluating the influence of information technology on tax administration within the South West region of Cameroon. It aimed to ascertain how information technology affects tax productivity and to discern the correlation between information technology and both tax implementation and tax planning. A descriptive research methodology was applied, utilizing questionnaires to collect data which was then analyzed using multiple regression and Pearson product moment correlation techniques. Findings indicate that information technology components—Online Tax Filing (OTF), Online Tax Registration (OTR), and Online Tax Remittance (OTRE)—have varying impacts on tax productivity, showing changes of -1.9%, 7.3%, and 31.5% respectively (with p-values of 0.85, 0.526, and 0.00). The study also uncovered relationships of -5.9% (p=0.520), 9.7% (p=0.290), and 34.4% (p=0.000) between OTF, OTR, and OTRE on Tax Implementation (TAXIMP). Moreover, the impact on tax planning was measured, revealing correlations of -3.8% (p=0.684), 14% (p=0.140), and -19.0% (p=0.038) for OTF, OTR, and OTRE respectively.

Chapter One: General Introduction

1.1 Background to the Study

The implementation of automated systems is widely recognized for its potential to substantially enhance business processes at relatively low costs (Wasao, 2014). With the aim to streamline operations and reduce overheads, tax authorities are increasingly adopting e-government solutions such as electronic tax filing (e-filing) (Amabali, 2009). According to the United Nations (2007), e-taxation involves the electronic submission of tax documents or returns through the internet, leveraging internet technology, the World Wide Web, and software to fulfill various tax administration and compliance functions.

Initially introduced in the United States, electronic tax filing by the Internal Revenue Services (IRS) was limited to tax refunds (Muita, 2011). The system has evolved to be embraced by numerous developed and developing countries, enhancing tax collection, administration, and compliance efficiency worldwide (Dowe, 2008; Ramayah, Ramoo, & Amlus, 2006). Previous studies have shown that automation can positively impact the cost of tax administration and the efficiency of revenue collection (Gidisu, 2012; Muthama, 2013; Gasteiger, 2011; Kioko, 2012; Kibe, 2011; Harrison & Nahashon, 2015; Otieno et al., 2013).

1.2 Statement of Problem

Despite extensive research on the adoption of information technology in tax systems, there remains a literature gap concerning the impact of information technology—specifically online tax filing, registration, and remittance—on tax administration in terms of productivity, planning, and implementation. This study seeks to fill that gap with a focus on Cameroon.

1.3 Research Questions

The research aims to address both a general question about the overall impact of information technology on tax administration and specific questions regarding the components and effects of such technology. 1.3.1 General Research Question How does information technology influence tax administration? 1.3.2 Specific Research Questions

• What constitutes tax administration?
• How is information technology defined?
• What are the effects of information technology on tax productivity, and what is its relationship with tax implementation and planning?

1.4 Objectives of the Study

The study is structured around a general objective to analyze the impact of information technology on tax administration and specific objectives to explore the concepts of tax administration and information technology, as well as their interrelations. 1.4.1 General Objective To critically assess the influence of information technology on tax administration. 1.4.2 Specific Objectives

• To elucidate the concept of tax administration.
• To define the concept of information technology.
• To investigate the effects of information technology on tax productivity and its association with tax implementation and planning.

Hypothesis

The study posits the following hypotheses: H1: Information technology significantly impacts tax administration. H1: Information technology does not have a significant impact on tax administration.

1.6 The Scope of the Study

The study focuses on the ramifications of information technology on tax administration, with a geographical concentration on Southwest Cameroon. This setting is expected to provide ample data for informed conclusions and recommendations.