The chartered institute of taxation of nigeria is the professional certified tax administrators in nigeria. We have also published, for the first time, an article by an academic. In other words, it is a contravention of tax laws whereby a taxable person. But despite the dominance of petroleum, taxation still remains an indispensable source of revenue. 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. 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 commencement of business. The study examines the effect of tax avoidance and tax evasion on personal income tax administration in nigeria. This edition of the nigerian tax journal summarizes the decided tax cases and administrative pronouncements by rtas and tax administrators in 2018. Tax evasion and tax avoidance, a problem which seems to have defied solution, had. But where a person provides services to another for e. Administration of taxes the administration of tax is vested in various tax authorities depending on the type of tax under consideration. Capital gains tax administration in nigeria is regulated by the capital gains tax act cap c. Tax evasion is a deliberate and willful practice of not disclosing full taxable income so as to pay less tax.
The problem of withholding tax in nigeria is the poor administration that leaves a loop hole in the system. Tax administration jamaica taj wishes to advise employers that an enhanced form p45 has been designed for them to electronically provide information on the particulars of employees laid off from their employment, via the taj website at. The tax system in nigeria is made up of the tax policy, the tax laws and the tax administration. Burning issues in the nigeria tax system and tax reforms on. Fiscal federalism visavis tax administration in nigeria is characterized by series of problems. Jun 14, 2017 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 commencement of business. Tax and taxation in nigeria europeanamerican journals. In view of the above, the administration of his excellency, the governor of kano state, dr. Article pdf 89kb numerous challenges can undo the benefits of rapid growth in emerging economies. The national tax policy seeks to provide a set of guidelines, rules and modus operandi that would regulate nigerias tax system and provide a basis for tax legislation and tax administration in nigeria. The tax system in nigeria is made up of tax policy and tax laws, stratified into tax assessment, tax collection and tax administration. According to azubike 2009 tax is a major source of government revenue all over the world, including nigeria.
By taiwo oyedele nigerias ranking has declined 3 places from 124 to 127 out of 8 countries in the latest global competitiveness index by the world economic forum. Pdf the impact of tax administration on revenue generation in. Impact of etaxation on nigerias revenue and economic growth. A withholding tax is the tax required by law to be withheld by a party from each payment made to another contracting party from the income or services rendered.
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. The act administered by both federal inland revenue service and the states internal revenue service. Each state has its state internal revenue service that handles tax administration, while federal inland revenue service administers pita in the federal capital territory. The administration of tax is vested in various tax authorities depending on the type of tax under consideration. Difficulties and prospects of tax administration in nigeria. Tax compliance barriers and internally generated revenue in. The rate of tax payable is not a fixed sum, depending on the gross income of the taxable employee, and the tax relief granted to him under personal income tax act pita. 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. Understanding withholding tax wht in nigeria completefmc. Issues and challenges inherent in the nigerian tax system. The nigeria tax system, like any tax system, is a tripartite structure which comprises of. Value added tax tax is a consumption tax chargeable on the value added to a product in the process of production.
Key words taxation, revenue generation, small and medium enterprises, tax monitoring, tax data base, tax. Tax reform and administration in nigeria pdf download. Tax to gdp ratio will continue to be low and likely to be lower than 2018 the factors that impacted on tax collection in 2018 remain relevant in 2019. Doc an assessment of tax administration in nigeria abubakar. The national tax policy is an initiative of the federal government of nigeria which is being. The difficulties and prospects of tax administration in nigeria a case study of the abia state board of internal revenue with abstract, chapter 15, references and questionnaire. Where a person rents or hires propertyservices from another, wht at the rate of 10% will apply.
National tax policy chartered institute of taxation of nigeria. Withholding tax is a tax leveled on income earners but made payable by the payer of the income rather than the recipient of the income. What is the problem associated with the tax laws and what are the likely amendments for same. The reforms brought about by the benue state tax administration from 2015 to 2018. Sometimes the purchaser ends up deducting withholding tax from payment invoice of multiple suppliers but fail to remit it to the relevant tax authority. Every person was expected to give part of his or her proceeds from cultivation of. This paper examines and analyses compliance and enforcement issues in tax administration in nigeria.
It was collected by the local chiefs for the purpose of administration and defence. 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. 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. Challenges and prospects a case study of lagos state board of internal revenue service chapter one introduction 1. Successful reform can enable a country to tackle the challenges of rapid growth and ensure that the flow of revenue is stable and longer lasting. Ten quick steps to unlocking taxrevenue collection in. Like all other indirect taxes, it is a tax that targets the final consumer of goods and services. Where a person rents or hires propertyservices from another, withholding tax at the rate of 10% will apply. Nigerias firs provides updates on tax administration in. To kiabel 2011 and soyode and kajola 2006, tax administration is the process of assessing and collecting taxes from individuals and companies by the. What are the prospects of tax administration in nigeria. As a general rule, income on a property rent, hire or lease payments or rights royalties situated in nigeria is liable to tax in nigeria, the place of payment not withstanding.
What are the implications of income tax administration for the nigerian economy. Babatunde fowler delivered, on 6 september 2018, a keynote address at a stakeholders meeting on tax administration and national revenue. Challenges and prospects, a case study of lagos state board of internal revenue service, largest undergraduate projects repository, research works and materials. The rates of withholding tax in nigeria varies among individuals, companies and corporate bodies. Guidelines on administration of withholding tax in nigeria. One major source of generating this revenue is taxation. Explanatory notes on withholding tax administration in nigeria. Tax credit allowable against tax payable on income derived from outside nigeria. All of these are expected to work together in order to achieve the economic goal of the nation. The thrust of this study is to examine the effect of tax administration on revenue generation in nigeria.
Reports have shown that despite the numerous efforts of government and its relevant agencies in the administration of tax in nigeria, there are still problems in the system such as under assessment of tax payers, tax evasion corruption among tax officials etc. It was observed that tax constitute a major source of revenue to nigeria. Article pdf available november 2018 with 7,051 reads. Impact of tax administration on government revenue in a. The nigerian tax system has undergone several reforms geared at enhancing tax collection and administration with minimal enforcement cost. Nigerian tax system and administration semantic scholar.
Feb 09, 2017 understanding withholding tax wht in nigeria therefore, you must know about. Everything you need to know about small business tax in nigeria. The purpose of vat in nigeria is to increase governments federal, state and local revenue from. This form of tax is reported to be one of the most stable sources of revenue to governments however. Impact of etaxation on nigerias revenue and economic. Burning issues in the nigeria tax system and tax reforms. Capital gains tax administration in nigeria tarababir. The components of the tripartite structure of a tax system will now be mentioned in relationship with the nigerian tax system. Doc an assessment of tax administration in nigeria.
Abdullahi umar ganduje ofr, is set to convert the kano state economy from crude oilbased to productivitybased using tax and non tax revenues sources so as to ensure faster and sustainable development of the state. The difficulties and prospects of tax administration in nigeria a case study of the abia state board of internal revenue abstract. Therefore, the main objective of this study is to critically analyze tax administration in nigeria. The need for the appraisal of tax administration has been over due. The administration of tax in nigeria is vested in the various tax authorities depending on the type of tax under consideration. Government, tax administrators, practitioners and academics alike. Pdf an assessment of the prospects of property tax. Yet, tax administration was found to have no insignificant effect on tax payment in. Pdf the article is about problems and opportunities of tax administration in gombe state, nigeria find, read and cite all the research you.
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. Administration of current taxes in nigeria vanguard news. Key words taxation, revenue generation, small and medium enterprises, tax monitoring, tax data base, tax education, internally generated revenue igr. This is to meet the standard of ensuring that economic realities are met. The value added tax vat administration in nigeria and the. Nigeria s is a tax system that is lopsided and have the dominance of oil revenue. It is rapidly replacing paperbased tax reporting systems. In nigeria, nobody can dispute the fact that though this taxes are been collected, they are. What are the problems associated with tax administration in nigeria. Revenue generation and tax administration in nigeria 1domma, sunday o. The objective of this study is to critically analyse tax administration in nigeria.
Tax policy, tax legislation and tax administration. According to the presidential committee on national tax policy 2008, the principal objective of the nigerian tax system is to contribute directly to. Development of tax law, administration and practice is a joint and several responsibility of the. The executive chairman of nigeria s federal inland revenue service firs, mr. Pdf the impact of tax administration on revenue generation. It also determined the impact of evasion and tax avoidance on the revenue generation in ogun state. This study is aimed at ascertaining the effect of tax administration on revenue generation in gombe state. Nigeria is liable to tax in nigeria, the place of payment not withstanding. Taxation in nigeria plus history of taxation in nigeria. Relevant tax authority may assess and charge tax on the turnover of a business, etc. Firs and billed to have been launched at pilot offices, this. Business or trade only partially carried on or deemed to be carried on in nigeria. For example, nigeria have found ways to enhance the proper administration for collection of revenue in nigeria. These include the grant of tax incentives, weak revenue administration capacity to deal with evasion and lack of data especially around the informal sector.
Citn was formed by the government for the purpose of training and educated professionals. What factors affect the implimentation of tax statutes in nigeria. According to the presidential committee on national tax policy 2008, the central objective of the nigerian tax system is to contribute to the. In this context, competitiveness is defined as the set of institutions, policies, and. O 1department of accountancy, federal polytechnic, ado ekiti, nigeria 2department of business administration and management, federal polytechnic, ado ekiti, nigeria abstract the study investigated the role of tax administration in revenue generation in nigeria between. Unfortunately, we are far behind on tax law reform in nigeria as the last time any business tax legislation was enacted. In nigeria, tax administration has been encumbered by several factors ranging from inadequate and unreliable data, paucity of administrative capacity, shortage of skilled manpower, corrupt tax officials, high incidence of tax avoidance and evasion. Concept and nature of taxation anyanwu 1997 defined taxation as the compulsory transfer or payment or occasionally of goods and services from private individuals. Tax administration and revenue generation of lagos state. The study conclusion avail for longrun taxation behaviour.
Tax compliance barriers and internally generated revenue. Such authorities are the joint tax board, which is the apex unifying body for all tax authorities in nigeria. National tax policy chartered institute of taxation of. Tax is a compulsory levy imposed by the government of a country on individuals and corporate entities in respective of return of service expected from that government. Electronic tax system was introduced by nigeria tax authority to increase financial collection, administration, render services to the tax payers all the time from anywhere, reduce costs of compliance and improve tax compliance. Property tax is generally a tax imposed by municipalities upon owners of real property within their jurisdiction based on the value of such property. Good tax administration requires strong technical capacity by the administrative agency but also a welldesigned tax. Withholding tax in nigeria administration and rates. According to soyode and kajola 2006, the problems of tax administration in nigeria are as follows. One of the most often overlooked is making tax administration more effective. The administration of tax is very important to any government as it is the body responsible for implementing and governing the tax laws and other tax related to assessment, collection and remittance of tax. By shamsudeen ladan shagari thesis submitted to othman yeop abdullah graduate school of business, universiti utara malaysia, in partial fulfillment of the requirement for the master of sciences international accounting.
Chapter one of tax reform and administration in nigeria. 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 impact of tax administration on revenue generation in gombe state, nigeria. By taiwo oyedele nigeria s ranking has declined 3 places from 124 to 127 out of 8 countries in the latest global competitiveness index by the world economic forum. The nigeria tax system the fiscal operation of nigeria is arranged in such a way that it adheres to the tenets of a federal system of government practiced in the country. Activities of nonnigerian companies, which would attract tax in nigeria and other. An assessment of the prospects of property tax administration. Tax policy forms the basis for tax laws while tax administration is the implementation of the tax laws.
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