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JOURNAL OF RESEARCH IN NATIONAL DEVELOPMENT VOLUME 8 NO 1, JUNE, 2010


AN ASSESSMENT OF TAX EVASION AND TAX AVOIDANCE IN LAGOS STATE

Jayeola Olabisi
Department of Financial Studies, Redeemer’s University, Mowe.
E-mail: jayeolaolabisi@yahoo.com.

Abstract
This study aims at examining the causes and effect of tax evasion and tax avoidance in Lagos state and proffering solution to   the menace of these tax irregularities. The total number of one hundred and twenty seven (127) was used to analyze the opinion of personal income taxpayers in Lagos State. The hypotheses were tested on the relationship between tax evasion and tax avoidance and the revenue of Lagos State Government and the relationship between tax evasion and tax avoidance and the tax rate. Statistical Package for Social sciences (SPSS) was employed in analyzing the questions in the questionnaire and chi-square was used to test the hypotheses. The study revealed that the tax administration in Lagos State is very inefficient and ineffective, and that there is no adequate information on the taxpayers in the state hence, some people can hide from their tax liabilities. It was also discovered that there is a significant relationship between tax evasion and tax avoidance and the revenue of Government and the tax rate.

Keywords: Tax, evasion, avoidance, administration
 


Introduction
The Webster Dictionary defines tax as a charge imposed by Government on property, individuals, companies, or transactions in order to raise money for public purposes. This definition may not be seen as ultimate, because tax has other objectives than public revenue generation. The history of direct taxation in Nigeria can be traced back to 1904, when the system of personal taxation was introduced by Lord Laggard in the Northern Nigeria. In 1917, the Native Ordinances in Nigeria was signed into law. This was extended to the Eastern Nigeria in 1928. The Income Tax Management Act of 1961was repealed and replaced with personal income tax act decree   (PITD)   NO 104 of 1993 (now Personal Income Tax Acts). The personal tax act regulates personal income tax in Nigeria.

No one likes to pay taxes, even though tax payment is inevitable for the provision of social welfare, hence individuals and companies want to reduce their tax liabilities and they try to do this either legally, by tax avoidance or illegally by tax evasion.

Ayua, (1996) opined that there is a general agreement from many quarters that there is a tremendous gap between actual and potential tax collections.  Soyode and Kajola (2006) distinguished between tax evasion and tax avoidance. They defined tax evasion as a deliberate and willful practice of not disclosing full taxable income so as to pay les tax and as a contravention of tax laws whereby a taxable person neglects to pay tax due or reduces tax liability by making fraudulent or untrue claims on the income tax form. While tax avoidance was defined as the arrangement of tax payers affairs using tax shelters in the tax laws, and avoiding tax traps in the tax laws, so as to pay less tax than ought to be paid, hence the person pays less tax by taking advantage of the loopholes in a tax laws.  Abdulrazaq (2001) gave this example to differentiate between tax evasion and tax avoidance. If two people marry in order to reduce their tax liabilities, they are involved in tax avoidance, but when they tell the tax authority that they are married when they are not, they are quit of tax evasion, and would be prosecuted as such.
Tax evasion is an attempt to escape tax liability (wholly or partially) by breaking the tax law and it is a criminal act since it is achieved principally by making false declarations such as under –reporting income or over reporting relieves and allowances. While, tax avoidance is an attempt to escape tax liability by circumventing the law. Thus, even though the tax evader and tax avoider have a similar end (ie reduce tax liability) their means to that end differ (Ayua, 1996). The evader is a criminal while the avoider is just smart taxpayer who exploits loopholes in the tax laws (and related laws) to reduce tax liability.

Tax evasion and tax avoidance are practices that have eaten deeply into the revenue that ought to be generated by the government, and hence affect the economic life of the country as   a whole, in view of this, this study seeks to examine these practices in Lagos by evaluating the reasons why people evade and avoid taxes, the methods used by people to achieve these and thereby proffer solutions to the practices.

Objectives of the study  
The broad objective of this study is to find out why people evade and avoid tax and suggest ways of minimizing the practices in Lagos. The broad objective is broken down to the following specific objectives:

  1. to establish  the existence of tax evasion and tax avoidance in Lagos State
  2. to assess (if any) the differences between tax evasion and tax avoidance
  3. to investigate why people evade and avoid taxes
  4. to determine the effect of tax evasion and avoidance on the revenue generated in Lagos State
  5. to examine the relationship between the tax rates, tax evasion, and tax avoidance
  6. to proffer solution to the problems of tax evasion and tax avoidance

Research questions

  1. Is the existence of loopholes in the Nigeria tax law system an opportunity  for tax avoidance ? 
  2. Is there any effect of tax evasion and tax avoidance on the Nigeria economy?
  3. How can tax evasion and tax avoidance be minimized and eliminated in Lagos State?        

Hypotheses of the study
The following hypotheses were formulated and empirically tested using chi- square statistical method:
Ho:    There is no significant relationship between tax evasion and tax avoidance and the total revenue generated by the Government.
H1:   There is significant relationship between tax evasion and tax avoidance and the total revenue generated by the Government    

Ho:     There is no significant relationship between tax rates and tax evasion and tax avoidance.
H1:       There is significant relationship between tax rates and tax evasion and tax avoidance.   

Literature review   
The history of personal income tax in Nigeria is incomplete without the due considerations to the roles played by Local Government or Native Authority Administrations as they were then called. Personal income tax, as is known in Nigeria, was first administered and collected by the Native Administrations in the name of Direct Taxation.  Under the direct Taxation Ordinances 1940, the assessment and collection of tax was the primary responsibility of Native Administrations through out the country and the tax so collected was their chief source of revenue. The direct taxation Ordinances was a poll tax, which taxed the residents in the protectorates and elsewhere other than township of Lagos. Income tax of 1943 was an admixture of poll tax and income tax and through it, tax was imposed upon the total income and or assessable of native residents in the township of Lagos and non native residents in Nigeria. During this period of tax under the income tax ordinances of1943was received by the central Government for the general revenue of the country and these under the direct taxation ordinances went to the Native Authority of the respective areas and regional governments. A more progressive income tax ordinances No 29 of 1943 CAP92 under which Europeans all over the country and Africans residents in Lagos were assessed came into operation on 1st of April, 1943.The root of the present laws on Personal Income Tax in Nigeria can be traced to the fiscal commission set up in 1957 which consisted of Sir Raisman as the chairman and professor R.C Tress as member.   The purpose of establishing the commission was to examine the jurisdiction and power of the various tiers of government in Nigeria at independence. Five legislations were enacted between 1959 and 1961 based on the recommendations of the Raisman fiscal commission and these are the Petroleum Profits Tax Act (PPTA) 1959, the Stamp Duties Act (SDA) 1959, and the Income Tax Management Act (ITMA) 1961, the Companies Income Tax Act (CITA) 1961.

Conclusively, before 1975 there were two principal Acts under which Personal Income Tax Act was administered. They are the Income Tax Management Act (ITMA) 1961and Personal Tax Law of each state. Nzotta (2007) opined that the problem of tax evasion has its genesis in Nigeria during the colonial era. During this period, taxes were looked upon by the restive natives and rural population as an instrument of oppression available to the British Colonial masters. The clamor for the self government necessitated a measure of civil disobedience which invariably involved evading taxes through all concieviable means. With self government and latter independence, attitudes to taxes changed.  However, the colonial masters were replaced with indigenous privileged elite’ class (civilian and military) whose hidden agenda essentially include personal enrichment with little accountability.  Thus, the resistances to payment of taxes hardened once again especially during the last ten years of military rule in Nigeria.     Nightingale (1997) stated that tax avoidance is the legal arrangement of the taxpayers’ affairs in order to minimize the tax liability, whereas tax evasion is illegal tax avoidance is legal provided the taxpayer acts with the framework of the law. Soyode and Kajola,(2006) asserted that if you overdo tax avoidance, you enter into tax evasion, tax evasion begins where tax avoidance ends they added. Where there are manipulations of various kinds which have the effect of reducing considerably the revenue that is due to the government, such practices should be prevented.  No one says that a person should arrange his / her personal affairs that the revenue Authority can put the largest shovel in it, however, the tax law requires and expects the observance of its rules, the underlying purpose of which is to ascertain the true amount of taxable income (Ayua, 1996).   

 Duru (2009) was of the opinion that, all citizens have the right to reduce the amount of taxes they pay as long as it is by legal terms. Ayua (1996) pointed out that tax evasion and tax avoidance are problems that face every tax system, but ours seem to be unique in the sense that considering the scale of corrupt practices, there is no comprehensive tax avoidance and tax evasion legislation, as there is in Britain, to curb tax evasion coupled with lack of skilled tax personnel. Soyode and Kajola, (2007) added that, tax evasion and tax avoidance represent one of the fundamental problems of tax administration in a developing country like Nigeria.   All forms of taxes in Nigeria to some extent avoidable and evaded largely because the administrative machinery that ensures effectiveness is weak. Tax evasion and uncontrollable tax avoidance must be viewed seriously. It leads to lost of revenue for the government even honest tax payers lost faith in tax system and are tempted to join the leagues of tax dodgers if it too wide spread and unchecked. A high degree of tax evasion has unpleasant repercussions on resources, it affects wealth redistribution and economic growth, it creates artificial biases in macro-economic indicators. No matter how fair a tax system appears to be on paper, it will lack the standards of equity if there is high incidence of tax evasion or artificial tax avoidance. Scholars like Tyagi ,(1982) affirmed that the problem   tax evasion and tax avoidance is global in nature.  For example, as early as 1920 in Britain, the royal commission on income taxes drew attention of the British government to the existence of tax evasion. Tax resistor typically do not take the position that the laws are themselves illegal or do not apply to them (as protesters do) and they more concerned with not paying for particular government polices they oppose (en. Wikipedia.org). Nzotta ,(2007)  concluded that, that the contradictions in development planning process in the past and the distortions in various macro- economic aggregates in Nigeria (like depreciating exchange rate, high unemployment level, high inflationary rate, etc) over the years which exacerbated the poverty problems and living conditions of Nigerians, have generally hardened the attitude of taxpayers to taxes.  

Tax avoidance and judicial approach                     
Ayua, (1996) stated that the courts are not universally agreed on its legal consequences. There are some judges who maintain that tax avoidance is not a moral or legal issue unless it has been expressly prohibited by the statute in unambiguous terms and are therefore, in the absence of such a statute, prepared to uphold its validity. The first approach lies in judicial neutrality or indifference observed by some judges who have seen nothing inherently evil in tax avoidance schemes. In case of IRC Vs Fisher’s Executers involving a limited company with large undistributed profits which has resolved to capitalize part of these profits and to distribute them pro-rata among its ordinary shareholders as a bonus in the form of 5%debentures stock, the whole aim being to prevent the shareholders from paying super tax on the bonus. It was held that the bonus paid on debenture stock was therefore not liable to super tax. Lord Summer said this:’my lords the highest authority has always recognized that the subject is entitled so as to arrange his affairs as not to attract taxes imposed by the crown, so far as he can do within the law, and he may legitimately claim the advantage of any express terms or any commission he can find in his favor in taxing acts. It may be a question whether these considerations of justice and public polices applied equally to a limited liability company, a creative of the law strictly controlled by statute.

In a case where it has no interest in either payment or escape from a tax that is not levied upon it’. As disturbing as that may be, the trend continued in the cases during this period. The dictum established by lord Clyde in the case of Ayrshire Pullman Motor Services and David M Ritchie Vs VIRC (1929) still holds good. He stated that ‘No man in this country is under the smallest obligation, moral or otherwise so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores.. The Inland Revenue is not slow and quite rightly to take every advantage which is open to it under the taxing statutes for the purpose of depleting the taxpayer’s pocket. And the taxpayer in like manner is entitled to be astute to prevent so far as he honestly can the depletion of his means by the Revenue. Hoffman, (1996) stated that, a true line exists between legal tax planning and illegal tax planning. Tax avoidance and tax evasion are merely tax minimization through legal technique. In this sense, tax avoidance is the proper objective of all tax planning. Tax evasion aimed at eliminating or reducing of taxes which connotes the use of subterfuge and fraudulent means to an end. Osuegbu,(2009) opined that tax evasion generally consists of criminal conducts. It involves breaking of the laws, and has no effect on the amount of the tax actually owed, although it may give rise to to substantial monetary penalties. Rabiu, (1980) stated that the tax avoider is simply the one who arranges his affairs in such a way that he pays little or no tax at all, while the tax evader is one who for a number of reasons refuses to fulfill his civil responsibility under the law. Duru,(2009) gave an example of tax evasion as falsification of books. Many corporate bodies keep different sets of financial reports including statement of profit and loss balance sheet. Soyode and Kajola (2006) submitted that refusing to register with the relevant authority; failure to furnish a return, statement or information keep records required, making an incorrect return by omitting or understating any of income liable to tax, refusing or neglecting to pay tax, overstating of expenses so as to reduce taxable profits or income, which will also lead to payment of less tax than would otherwise have been paid. A taxpayer may also hide away totally without making any tax returns at all, and entering into artificial transactions.

Duru, (2009) asserted that many individual and corporate bodies set up non-profit making organizations including non-governmental organizations (NGOs) and religious bodies and siphoned profit recorded by various corporate bodies through donation to such organizations purposely to reduce the amount of tax paid. Common occurrences of tax vices are usually in the areas of transfer pricing; thin capitalization and apportionment of contract costs between local contractors and foreign companies (Catatax.org). Ville-Pekka, (2006) asserted that , tax havens offer themselves as a place where non-residents can escape tax obligations in their countries of residence. OECD regards tax haven as a state or region areas that offers low or zero tax rate for non-residents and had secretive legislations and is not corporative in information exchange. Palan,(2002) stated that the key features of of a tax havens are low or minimal taxes available to non residents, ring-fencing of tax vehicles, tailored tax regimes, minimal business presence requirements, lack of legislative transparence, banking secrecy, authority reluctance to exchange information, few or no restrictions or regulations. In Lagos State, income tax assessment forms and a tax table have been introduced to assist people to determine their tax liabilities. Mini tax offices are now established in all the major markets. In partnership with collecting banks and individual tax payer can now conveniently assess himself by refrence to a table which shows various income brackets the allowances and tax payable in respect of each. The self assessed individual can also obtain the simplified assessment form free of charge and pay his / her tax at any of the over 1200 bank branches and 36 LIRS Tax Stations across the state. To guide against exploitation of the tax payers by fraudulent tax officials, the Lagos State has also established a central complaints and information unit for its Revenue Generating agencies. This unit creates an avenue for member of the public to lay their complaints and make suggestions towards improvement of Lagos State Administrative processes. Ipaye,(2008) declared that Lagos State Government has concluded plans to regulate tax collection by Local Government Areas in the state.

Methodology
The focus of this study is on those residing in Lagos Nigeria. The tax payers considered were in employment, either self-employment or otherwise and the respondents were at least 20 years of age. The sample size was 150 respondents and a judgmental sampling technique was adopted to choose those taxpayers who have an understanding of the term ‘tax avoidance and tax evasion’ out of which one hundred and twenty seven were completed, returned and analyzed.

Instrument
Questionnaire was used to gather data for this study because it guarantees a high degree of anonymity of individuals as well as ensures the use of standardized questions for all the respondents. The questionnaire contained six questions on demographic information and fifteen questions on the variables observed. The Likert scale (a 5- point) rating scale was used. A package known as Statistical Package for Social Scientist (SPSS) was employed to analyze the responses while chi-square statistical method was used to test the hypotheses.


Bio-Data
Sex: male    79
       Female 48

Marital status: single              57
                      ; Married           69
                       : Widowed         1
Age:                20years and above

Educational Qualifications
SSCE/NCE                                15
OND/NCE                                 20
B.Sc/HND                                 64
MBA/MSc                                 26

Professional qualifications
ACA/ACCA                               8
OTHERS                                     3

Nature of Employment
Self employed                            10
Civil service                               52
Private employment                   46
Others                                         19

Questions on variables


S/N

variables

SA

A

UN

D

SD

1

The system of tax administration in Nigeria is efficient and effective?

8

31

12

55

21

2

Tax avoidance is the right of an individual as long as it is within the framework of law, hence it is not immoral?

23

25

6

28

45

3

Tax evasion and tax avoidance have an adverse effect on the state government revenue?

1

5

5

53

63

4

The level of corruption at all levels is used by people as an excuse to evade tax?

 5

12

13

52

45

5

Non availability of the database of all taxable individuals by the revenue authority provides an opportunity for people to evade tax?

69

36

11

6

5

6

There is shortage of experienced and highly motivated personnel for tax assessment and tax collection?

31

54

19

15

8

7

The procedures for tax assessment and tax collection are ambiguous?

32

41

29

20

5

8

Strict punishment should be meted out on tax defaulters?

32

41

29

20

5

9

The penalties imposed presently are enough deterrent to prevent potential tax defaulters?

6

37

27

31

26

10

The loopholes in the tax laws are used to avoid tax?

36

56

23

9

3

11

The government at all levels should make efforts towards fighting cases of tax offences?

60

57

6

3

1

12

Tax policies should be reviewed and updated constantly for an effective system to be in place?

76

40

8

2

1

13

People are not enlightened on the use of revenue generated from tax?

61

45

6

10

5

14

There is need for better mechanisms for assessment and collection of taxes to be put in place?

83

34

8

0

2

15

If the tax rates are reduced, more people would be encouraged to pay their taxes?

43

32

18

20

14

Source: Survey Research (evaluated using SPSS)


Interpretation
The first item shows that 6.3% of the respondents were strongly agreed, 24% agree with this statement, 9.4% were not decided, 43.3% disagreed with the statement, while 16.5% strongly disagreed with the statement. Therefore, the system of tax administration in Nigeria is not efficient and effective. The second item shows that of the respondents 26% was strongly agreed with the statement, 9.4% was undecided, 16.5% disagreed, 16.5% disagreed, while 7.1% strongly disagreed with the statement. Conclusively, tax evasion and tax avoidance increase inequality in income between the rich and the poor. From the third question, 49.6% of the respondents were strongly agreed, 41.7 simply agreed to the statement, while 41.7% agreed to the statement, 3.9% was not decided on the statement, and 3.9% disagreed, and 0.8% was strongly disagreed to the statement. Hence, the conclusion was tax evasion and tax avoidance has adverse effects on the state government’s revenue. The fourth item revealed that 35.4% of the respondents strongly agreed with the statement, 40.9% agreed, 10.2% was not decided, 9.4% disagreed with the statement, 3.9% of the respondents was strongly disagreed with the statement. Therefore, the degree of corruption at all levels is used as an excuse to evade tax. Item five depicted that 54.3% of the respondents strongly agreed to the statement. 28.3% agreed with it, 8.7% were undecided about the question, 4.7% disagreed with it, while 3.9% were strongly disagreed with the statement. Therefore, it was concluded that, non-availability of the database of all taxable individuals by the revenue authority provides an opportunity for people to evade tax. Item six shows that 24.4% of the respondents were strongly agreed to the statement, 42.5% agreed to it, 15% were not decided on the statement, 11.8% disagreed, while 6.3% were strongly disagreed with the statement. Hence, there is a shortage of experience and highly motivated personnel for tax assessment and tax collection. From item ten, 28.3% of the respondents strongly agreed with the statement, 44.1% agreed to the statement, while 18.1% were not decided, 7.1% disagreed with the statement, and 2.4% strongly disagreed. Therefore, the loopholes in the tax laws are seen as opportunity to avoid tax. Item twelve shows that, 59.8% of the respondents strongly agreed, 31.5% agreed to the statement, 6.3% were not decided, 1.6% was not agreed with statement, and 0.8% was strongly disagreed with the statement. Therefore, government should find a way of raising the level of tax compliance. Item fourteen reveals that 65.4% of the respondents strongly agreed with the statement, 26.8%  agreed  while 6.3% was undecided as to the statement,  no respondent disagreed and 1.6% strongly disagreed. The last item shows that 33.9% of the respondents  strongly agreed with the statement, 25.2% just agreed, 14.2% were undecided about the statement, 15.7% disagreed, while 11% of the respondents strongly disagreed with statement. It was therefore concluded that, if tax rates are reduced, more people would be encouraged to pay taxes.

Test of Hypotheses
Chi-square (X2) statistic is used to test the hypotheses of this study. And the test is carried out as follows;
Hypothesis one
The hypothesis here is closely linked with question ten of the questionnaire administered, Ho:    There is no significant relationship between tax evasion and tax avoidance and the total revenue generated by the Government.
H1:   There is significant relationship between tax evasion and tax avoidance and the total revenue generated by the Government    


 

 

 

 

The responses for each range on the Likert scale are as follows;


Responses

Oi

Ei

Oi-Ei

(Oi-Ei)2

(Oi-Ei)2/Ei

SA

63

25.4

  37.6

1413.76

55.66

A

53

25.4

  27.6

761.76

29.99

UN

  5

25.4

-20.4

416.16

16.38

SD

  5

25.4

-20.4

416.16

16.38

SD

  1

25.4

-24.4

595.36

 23.44

Total

127

127

    0

 

141.85

Degree of freedom (v) =n-1
Where n=5, v=5-1=4


From the chi square table, 4degree of freedom at 5% level of significance gives 9.488, therefore, calculated X2 =141.85
                 Tabulated X2 = 9.44
Decision:
Since the cal X2 is greater than the tabulated X2 of 9.488 at 0.05; reject the null hypothesis and accept the alternative hypothesis that there is a significance relationship between tax evasion and the total revenue generated by the state government.

Hypothesis two:
The hypothesis is closely linked with question fifteen of the questionnaire administered
Ho:     There is no significant relationship between tax rates and tax evasion and tax avoidance.
H1:       There is significant relationship between tax rates and tax evasion and tax avoidance.   
The responses for each range on the Likert scale are as follows;


 

responses

Oi

Ei

(Oi-Ei  )

  (Oi-Ei)2

(Oi-Ei)2/Ei

SA

43

25.4

17.6

309.76

12.20

A

32

25.4

6.6

43.56

1.71

UN

18

25.4

-7.4

54.76

2.16

D

20

25.4

-5.4

29.16

1.15

SD

14

25.4

-11.4

129.96

5.12

Total

127

127

 

 

22.34


Degree of freedom (v) = n-1
Where n =5 v =5 -1 =4
From the chi-square table, 4 degree of freedom at 5% level of significance gives 9.488, therefore,
Calculated X2= 22.34
Tabulated X2 = 9.488
Decision
Since the calculated X2 is greater than the tabulated X2 of 9.488 at 0.05, reject the null hypothesis and accept the alternative hypothesis that there is a significance relationship between the tax rates and tax evasion and tax avoidance.

Findings
 Based on the analysis, the following findings were arrived at;

  1. Tax evasion and tax avoidance have a significance relationship with the government revenue; hence government revenue is being seriously affected by tax irregularities. The overall evidence suggests that tax evasion and tax avoidance are very significance in Nigeria and the degree of the significance depends on the extent to which the government relies on taxation as a means of government revenue.
  2. There is a significant relationship between tax rates and evasion and tax avoidance, such that; if the tax rates are increased; more people would evade or avoid tax liability, whereas, if the tax rates are reduced more people would be encouraged to pay taxes and desist from tax irregularities.
  3. It was submitted that tax avoidance and tax evasion could be reduced and possibly eliminated.
  4. Taxpayers seek for enlightenment on the use of revenue collected; this is because there is a general consensus among the tax payers that the amount collected as tax is not commensurate with amenities government claims to use the money to provide.
  5. Finally, the study shows that Nigeria tax system is not efficient and effective in its totality; there is no available database of all taxable individuals, the mechanism in place for the assessment and collection of taxes are not enough and there are no strict measures in place.

Conclusion
 The effect of tax evasion and tax avoidance on the Lagos state economy can not be overemphasized. The revenue of government has been greatly affected .the current tax system being used gives room for loopholes, the corrupt tax officials, the lack of adequate data and many more have worsened the situation. In addition, a reduction in tax rate is even not an optimum solution to the problem, simply because some people would still attempt to evade or avoid taxes no matter the rates of taxes. Therefore, there should be completely overhauled of the Nigeria tax system. The existence of substantial number of tax evaders in Lagos state should be a matter of concern to the policy makers and tax administrators. Tax avoidance can largely be checked by plugging the loopholes in the tax law and carefully drafting of all new tax legislation. All the tax laws should be further codified and harmonized. Furthermore, tax enforcement machinery should be strengthening. The level of punishment should also be stricter and the legal provisions for doing this should be clearly stated. Continuous education for citizenry has to be embarked upon and step has to be taken to convince the tax payers that the money collected in form of taxes are judiciously spent. The state Board of internal Revenue and the Revenue collecting officers at the Local Government must wake up to their duties. Finally, database for tax administration at all levels of government should be promptly computerized to ensure that the system of information storage processing and retrieval is efficient.  Tax clearance should also be presented where an individual wants to transact business with government agencies.
   
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