The tax system in nigeria is made up of the tax policy, the tax laws and the tax administration. The study will address the link between tax administration and governance in the specific cases of lagos. Challenges and prospects, a case study of lagos state board of internal revenue service, largest undergraduate projects repository, research works and materials. Tax administration and revenue generation of lagos state. Withholding taxes from companies and those from residents of the abuja, fct, members of the armed forces, police force, and officer of nigerian foreign services are paid to federal inland revenue service, while those of the individuals are paid to the relevant states internal revenue service where the particular taxpayer resides. Taxation in nigeria plus history of taxation in nigeria. Anyamu 1997 writing on tax policy planning and administration in nigeria opines that a tax system that ignores the tax planning and administrative aspect is deemed to remain a good system only on paper. Understanding withholding tax wht in nigeria completefmc. Jun 14, 2017 value added tax administration in nigeria value added tax vat was introduced by the federal government of nigeria and is provided for by the value added tax decree 102 of 1993 which became effective in 1994 which requires manufacturers, wholesalers, importers and suppliers of vatable goods and services to be registered within six months of. Tax policy forms the basis for tax laws while tax administration is the implementation of the tax laws.
This dearth of economic literature on comprehensive analysis of tax administration, policies and law in our economy apparently leaves a gap between what the people perceive to be reliable tax revenue administration and what it is in reality. A mixed research design was used, and data was collected through survey and. Value added tax vat in nigeria is levied on all products and services traded within the country and payable to government at a 5% rate, one of the lowest in the world. Tax, simply is a charge imposed by governmental authority upon property, individual, or transaction, to raise money for public. The study period spans economic cycles for about 66 percent of the life of. Aug 16, 2016 as nigeria seeks to reposition its economy, to navigate through the economic recession era, one area it needs to address critically is tax administration in the country. It is established under section 85 of the personal income tax act, amendment 2011.
Educational tax is also prepared and submitted with annual self assessment. The national tax policy is an initiative of the federal government of nigeria which is being. An overview of national tax policy and administration in nigeria. The stakeholders meeting was aimed at charting the way forward for the. Nigeria updated october 2017 nigeria transfer pricing country profile updated october 2017 summary reference the arms length principle 1 does your domestic legislation or regulation make reference to the arms length principle. It is a clear statement on the principles governing tax administration and revenue collection. Vat was proposed and a committee was set up to carry out feasibility studies on its implementation. The administration of tax in nigeria is vested in the various tax authorities depending on the type of tax under consideration.
The study examines the administration of companies income tax in nigeria. This paper attempts to look at the nigeria tax administration and its capacity to reduce tax. Tax policy, tax legislation and tax administration. Taxes payable to the federal government are administered by the federal inland revenue service firs, while those payable to the state governments are administered by the state boards of internal revenue sbirs of the thirty six states of the federation. The taxable period is the fiscal year, which runs from 1 january to 31 december. The study uses that from federal inland revenue services firs on petroleum. All of these are expected to work together in order to achieve the economic goal of the nation. The study focuses on the impact of petroleum profit tax, company income tax, personal income tax, value added tax revenue on nigerias economic growth between 1980 and 20. The act administered by both federal inland revenue service and the states internal revenue service. Administration of current taxes in nigeria vanguard news.
Activities of nonnigerian companies, which would attract tax in nigeria and other. Capital gains tax administration in nigeria tarababir. Nigeria updated october 2017 nigeria transfer pricing country profile updated october 2017. The ntp is a deliberate effort towards entrenching a robust and efficient tax system. Income tax in nigeria is levied at a progressive rates capped at 24%. Rates of withholding tax there is an obligation on the payer either resident or nonresident of.
Such authorities are the joint tax board, which is the apex unifying body for all tax authorities in nigeria. Global edition is a free, personalized email subscription service that allows you to receive ey global tax alerts, newsletters, events, and thought leadership published across all areas of tax. Pdf the thrust of this study is to examine the effect of tax administration on revenue generation in nigeria. Offences and penalties late filing of returns s 5535 failure to file tax returns attracts a penalty of. The forum on tax administration fta was established in july 2002 to develop a global response to tax administration issues. D73, h26, h30, j33, k42, z project title taxation,aid and democracy tax evasion and corruption in the tanzania and uganda revenue authorities project number 9902822022. Unfortunately, we are far behind on tax law reform in nigeria as the last time any business tax legislation was enacted. Capital gains tax administration in nigeria is regulated by the capital gains tax act cap c. Impact of tax administration on government revenue citeseerx. Tax administration self assessment regulations 2011. The fta aims to influence the environment within which tax systems operate. This study analyses the relevance and the problems of value added tax vat in nigeria. The government is also seeking for a way to incur minimal cost in the process of enforcing tax on nigerias.
It is regulated by the vat act and the vat amended. Tax reform and administration in nigeria chapter one introduction background to the study the recent global crisis in the world has brought to the fore the need to note that this overdependence on oil creates unnecessary shocks and thus, the need for diversification of the nations resource base and long term growth path. The nigerian tax system has been taken through several reforms and modifications. Taxes in nigeria can be levied on citizens by tax authorities depending on the type of tax involved. As such, it is required to register for cit and file its tax returns. This study examines the determinants of tax administration efficiency. Nigerias firs provides updates on tax administration in. Companies may create a tax profile with the firs and file their returns electronically once the system becomes fully functional. Federal inland revenue service deals with the taxation of capital gains arising from the deposal of property by corporate entities while the. The tax structure of any economy tends to vary substantially according to the level of development reflecting the availability of tax bases and. In 1978, the task force on tax administration under the leadership of alhaji shehu musa formed the federal inland revenue service firs as the operational arm of federal board of inland revenue fbir.
Nigerians under the law are to pay 25% of their total worldwide income while foreign individuals are to pay 25% of the profit made in nigeria only. There is an unwillingness of the people to pay tax in nigeria. What you need to be aware of by taiwo oyedele on december 12, 2011 the management board of the federal inland revenue service the board in exercise of the powers conferred on it by section 61 of the federal inland revenue service. According to the presidential committee on national tax policy 2008, the central objective of the nigerian tax system is to contribute to the. The study investigated the role of tax administration in revenue generation in nigeria between 1994 and 2015. Pdf the article is about problems and opportunities of tax administration in gombe state, nigeria find, read and cite all the research you need on researchgate. Download undergraduate projects topics and materials accounting, economics, education.
No companies income tax act, section 22 2 b regulation 4 of the income tax transfer. In the light of this reality and the general realisation that it would be foolhardy if nigeria continues to solely depend on oil revenues whilst neglecting other nonoil sources, adapting the tax administrative. The executive chairman of nigerias federal inland revenue service firs, mr. D73, h26, h30, j33, k42, z project title taxation,aid and democracytax evasion and corruption in the tanzania and uganda revenue authorities project number 9902822022. Nonresident companies providing professional, consultancy, management and technical pcmt services to nigeria residents will be subject to tax at 10% final tax where such company has a significant economic presence to be determined by the minister of finance in nigeria. Three research questions were formulated for the study. Here are the applicable rates for personal income tax in nigeria. Global tax alert nigerias firs provides updates on tax administration in nigeria new. Government, tax administrators, practitioners and academics alike. Value added tax in nigeria how to calculate vatable. According to the presidential committee on national tax policy 2008, the principal objective of the nigerian tax system is to contribute directly to public finance. Tax administration in nigeria is vested in the three tiers of government.
Nigerias firs provides updates on tax administration in nigeria. As nigeria seeks to reposition its economy, to navigate through the economic recession era, one area it needs to address critically is tax administration in the country. Basic principles of taxation in nigeria tax nigeria mondaq. Petroleum companies are required to file their returns of estimated tax within two. The tax revenue collection in nigeria faces some formidable problems which includes the high tax rates and complex filing procedures, multiple taxation and lack of proper enlightenment, lack of statistical data, poor tax administration, and inability to prioritize tax effort, multiplicity of taxes and increase in underground economy. Best accounting software for small business owners in nigeria. Taxes payable to the federal government are administered by the. Taxation patterns throughout history are largely explained by administrative consideration. The pkf worldwide tax guide 20 wwtg is an annual publication that provides an overview of the taxation and business regulation regimes of the worlds most significant trading countries.
Unfortunately, the nigerian tax system is faced with challenges, such as loss of revenue. A survey of vatable nigerian organizations, firs staff and the publics was conducted to gain insights into. Tax is a medium which countries across the globe depend upon so as to carry out the mandate of their citizens. This dearth of economic literature on comprehensive analysis of tax administration, policies and law in our economy apparently leaves a gap between what the people perceive to be reliable tax revenue administration and what it. Tax administration and revenue collection functions are performed by different. Tax administration tax evasion uganda jel classification. Personal income tax amendment act, 2011 pitam is the principal act for the taxation of employees in nigeria. Generally, tax is assessed in accordance with some reasonable rules of. It brings together commissioners from 53 oecd and non oecd. The tax system in nigeria is made up of tax policy and tax laws, stratified into tax assessment, tax collection and tax administration. Aug 09, 2016 in 1978, the task force on tax administration under the leadership of alhaji shehu musa formed the federal inland revenue service firs as the operational arm of federal board of inland revenue fbir. Pre 2002 tax reform efforts the federal government had taken farreaching steps aimed at reforming the nations tax system before the pre 2002 reform efforts.
Firs and billed to have been launched at pilot offices, this. Section 4 examines the effects of fiscal measures on the economy in the country. An overview of national tax policy and administration in. Section 4 examines the effects of fiscal measures on the economy in. An examination of the laws on tax reliefs and exemption in. Federal inland revenue service firs we do our best to provide accurate and up to date information. The executive chairman of nigeria s federal inland revenue service firs, mr. The national tax policy seeks to provide a set of guidelines, rules and modus operandi that would regulate nigeria s tax system and provide a basis for tax legislation and tax administration in nigeria. Babatunde fowler delivered, on 6 september 2018, a keynote address at a stakeholders meeting on tax administration and national revenue.
The nigerian tax system has undergone several reforms geared at enhancing tax collection and administration with minimal enforcement cost. Development of tax law, administration and practice is a joint and several responsibility of the. Application of income tax administration provisions. Tax identification number tin in nigeria, every citizen of nigeria working with the government, the private sector or owns. It was the view of popoola 2009 that nigerian tax administration and practice be. Most of the laws in the compendium are contained in the various volumes of the laws of the federation of nigeria. Taxation, revenue allocation and fiscal federalism core.
Administration of taxes in nigeria tax nigeria mondaq. The sale of real estate properties is subject to a 10% tax on the gains. Impact of tax administration on government revenue in a. All the companies registered in nigeria, in other words, all the companies subject to companies income tax cit are also liable to educational taxedt. The purpose is to further enhance the process of tax collection and administration in nigeria.
In january, 1993, the then government agreed to introduce vat by the middle of the year. Tax reform and administration in nigeria taxation project topics. The administration of tax is vested in various tax authorities depending on the type of tax under consideration. The firs is vested with the power of administration and management of vat in nigeria. Master file consistent with annex i to chapter v of the tpg.
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