Federal government, tax revenue, nigeria, revenue collection, firs. Under companies income tax act you have to pay companies income tax if you are a resident or nonresident company incorporated in nigeria. The cit rate is 30% for large companies companies with gross turnover greater than n100m, assessed on a preceding year basis i. Introduction globally, taxation is the nucleus and the path to development because it is one of the formidable options to generate revenue by government. The legal framework and system of taxation in nigeria. In a bid to stem the challenges of multiplicity of taxes and levies in nigeria, the legislature enacted the taxes and levies approved list of collection act 1998, whereby taxes, levies and fees collectible by the various tiers of government were spelt out as follows.
In nigeria, different legislations that allow the government tax its citizens and to increase the tax revenue of the country exist. This form of tax is reported to be one of the most stable sources of revenue to governments however. Taxation in nigeria understanding nigerian tax system. In nigeria, taxation has been in existence even before the coming of the colonial men or the british. Generally, a substantial part of the revenue of the federal, state and local government of nigeria is realised from taxation but theres more to government earnings than just taxation. Pdf on jan 1, 20, oyewo babajide and others published taxation and tax policy as government strategy tools for economic development in nigeria find, read and cite all the research you need. Double taxation relief between the federal republic of. Looking at the history of taxation in nigeria, the beginning of the colonization period was connected with various trading posts and companies in the west africa. This is to align the tax returns with the relevant government fiscal year. There is no doubt that taxation must have affected the economic development of nigeria. Under this period, community taxes were levied on communities. Property tax is generally a tax imposed by municipalities upon owners of real property within their jurisdiction based on the value of such property.
Taxation in nigeria and history of taxation in nigeria a tax in nigeria is a compulsory levy imposed by the federal government of nigeria on individuals and corporate entities in respective of return of service expected from the government. The study focuses on the impact of petroleum profit tax, company income tax, personal income tax, value added tax revenue on nigeria s economic growth between 1980 and 20. To determine the effects of taxation on employment and salaries of working in nigeria. Pdf nigeria is governed by a federal system, hence its fiscal operations also adhere. The study period spans economic cycles for about 66 percent of the life of. Taxes are levied in almost every country of the world, primarily to raise revenue for government expenditures, although they serve other purposes as well.
In nigeria, nobody can dispute the fact that though this taxes are been collected, they are. The objective of this study is to investigate the impact of taxation on economic development of nigeria proxy by the gross domestic product gdp. As a result, the gb exploited the resources and people of africa. Generally, the work is done to determine and know if taxation forms a large part of government revenue and how the utilization of this revenue effectively to promote economic gainful activities, developments and to erase the erroneous belief that it is a. Government in nigeria is in recent times attaching keen interests in getting its citizens individuals and corporate bodies to brace up to the responsibilities of paying taxes. Therefore, this study will throw more light on the effect of etaxation on government revenue in nigeria by focusing on the prepost analysis of taxation in nigeria.
Nigerias tax system is also tasked with the responsibility of providing the government with enough resources to finance the countrys development company tax and petroleum royalties in fact account for the primary source of government revenue. Taxation and economic growth in nigeria onakoya, adegbemi babatunde1 afintinni, oluwatobi ibukun2 1,2department of economics, banking and finance, babcock university, ilishan remo, nigeria abstract over several decades, taxation has been taken as a veritable medium of engineering the growth or performance of an economy. In conclusion,after a proper explanation of the various taxes paid in nigeria,what the levels of government can ask for,what the taxes collected by government is used for. This publication is a summary of the major tax laws in nigeria, prepared for general. An appraisal of taxation as a source of government revenue. Nigeria depends on crude exports for about 70 per cent of government revenue and more than 90 percent of foreign exchange. Pdf this paper investigated state government taxation in nigeria with a view to determine its impacts on economic growth. Download complete project materials on taxation and revenue generation in nigeria local government administration from chapter one to chapter five with references taxation is seen a source of revenue generation with a particular view of asa local government, before now it is fact that lots of research has been carried out with regard to activities of the local government many problems which. I hope the readership have been properly educated on the role of taxation in the nigerian economy. Given that the purpose of introducing electronic tax system is to improve revenue collection which will in turn improve the countrys economic growth, the study empirically examined how the implementation of etaxation in 2015 has affected tax revenue, federally collected revenue and taxtogdp ratio. Impact of taxation revenue on economic growth of nigeria.
Federal inland revenue service firs we do our best to provide accurate and up to date information. Like other countries, the main function of the nigerian tax system is to generate revenue for the running of the government at all levels and. Obviously, everything about the nigerian taxation cannot be covered in this article, so try to click the links provided on certain text to get a wider scope and explanation. The british empire tried to fight for economic dominance in the region.
Introduction taxation is a main source of revenue to governments across the world. Taxation is a major source of government revenue all over the world and governments use tax proceeds to render their traditional functions, such as. The fiscal regime governing petroleum profit taxation in nigeria babatunde ajani adeyemi introduction tax is a compulsory financial exertion by government on its citizens aimed at servicing the needs of the state. Nigeria has a number of tax treaties referred to as double taxation agreements with a number of countries, these are designed to ensure that the tax payable in nigeria on the profits of a nigerian company being remitted into the country are reduced by the amount of foreign tax paid abroad and vice versa where an overseas company receives profits from nigeria that. The effect of taxation on nigeria economy project topics. The main objective of the study is to investigate the impact of taxation revenue on nigeria economic growth. Taxation and local government development in nigeria pdf. Nigeria tax system is historical odusola, 2006 dates back to 1904 when the personal income tax was introduced in northern nigeria before the amalgamation, through the native revenue ordinances 1917 the west, the direct taxation ordinance no. Relevance of tax revenue resources to infrastructural.
The impact of tax policy on economic growth in nigeria. Pdf taxation and tax policy as government strategy tools. Basic principles of taxation in nigeria tax nigeria mondaq. Many companies in the past have lost a huge fraction of their profits to. 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. Given the dynamic nature of taxation, ola 2001 argued that tax reforms are necessary to effect the required changes in the national economy. Table 1 nigerias federal, state and local tax jurisdiction and assignment. However, this meant to appraise taxation in nigeria and in odootin local government in particular, among these problems are wrong declarations of income, which is rampant among the self employed citizen like farmer and businessmen and others. Taxation, imposition of compulsory levies on individuals or entities by governments. For taxation to make the desired impact on the economic development of nigeria as the major source of government revenue. The impact of taxation as an aid to economic development includes abstract and chapter one, complete project material available the impact of taxation as an aid to economic development in edo statea case study of oredo local government area, edo state, nigeriaproposalthe research work will discuss in detail the impact of taxation as an aid to. State governments in nigeria have developed over a number of years. However, taxation has provided reasonable revenue from government in recent times. For instance, it was revealed that the significant increase in revenues from.
The local government collects taxes through the local government revenue committee. The government is also seeking for a way to incur minimal cost in the process of enforcing tax on nigerias. Taxation, revenue allocation and fiscal federalism core. The study will address the link between tax administration and governance in the specific cases of lagos. This act regulates the personal income tax throughout the federation. Resident companies are liable to corporate income tax cit on their worldwide income while nonresidents are subject to cit on their nigeriasource income. The federal inland revenue service has also developed a. Impact of etaxation on nigerias revenue and economic. Historically, the development of direct taxation in state government in nigeria can be traced to the period before the british precolonial period.
Taxation is not a new word in nigeria or the world as a whole. Under current nigerian law, taxation is enforced by the 3 tiers of government, i. Taxation in nigeria plus history of taxation in nigeria. The sale of real estate properties is subject to a 10% tax on the gains. Sources of government revenue in nigeria nigerian finder. The bill also seeks to address the taxation of industries, such as insurance, startups and the capital markets, evaluated by the federal government of nigeria as critical to the growth and development of the nigerian economy with a view to stimulating activities in. Impact of tax administration on government revenue in a. Ofurum et al impact of etaxation on nigerias revenue and economic growth. Unfortunately, we are far behind on tax law reform in nigeria as the last time any business tax legislation was enacted or.
In nigeria, the governments fiscal power is based on a threetiered tax. The modern view of taxation stems from the common premises that no one can be an island for him or herself. World bank and pwc 2015 3 paying taxes survey in 2005 revealed that taxpayers are able to file tax returns electronically in about 45% of the countries. This means that in the modern society, societal members are. Tax has been defined as a monetary charge imposed by the government on persons, entities, transactions and properties to yield revenue.
Pdf an assessment of the prospects of property tax. In nigeria, the government can emphasize on any one of the tax forms depending on the objective it wants to pursue. These legislations are the personal income tax amendment act 2011, companies. Agreement between the government of the united kingdom of great. Taxation can be defined as the system of imposing a compulsory levy on all income, goods, services and properties of individuals, partnership, trustees, executorships. This study examined the impact of etaxation on nigerias revenue and economic growth.
Full project the effect of etaxation on government. In other to reawaken the consciousness of nigerian government and citizens on the effective use of taxation as a developmental tool, and examine the effect the tax system have so far on the economy. How to understand taxation in nigeria if youre considering starting a business in nigeria, either as a local entrepreneur or a foreign investor, tax laws are a very important factor to consider. There was the introduction to tin, which is a unique taxpayers identification number and tin became effective since february 2008. Government, tax administrators, practitioners and academics alike. Taxation and local government development in nigeria with abstract, chapter 15, references and questionnaire.
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