Where a person rents or hires propertyservices from another, withholding tax at the rate of 10% will. Taxation, revenue allocation and fiscal federalism core. Business or trade only partially carried on or deemed to be carried on in nigeria. Tax reform and administration in nigeria taxation project topics. Unfortunately, we are far behind on tax law reform in nigeria as the last time any business tax legislation was enacted. He is an author and public speaker on tax, business and economic matters. The provisions on safe harbour under the tp regulations of nigeria are not industry specific or limited to a specified taxpayer criteria. For starters, businesses must overcome difficulties in accessing their tax and financial data, especially when it is spread out among multiple enterprise resource planning erp systems. The recent reforms include the introduction of tin. Many countries are implementing new data submission and electronic auditing requirements, creating a whole new set of challenges. However, when compared with the same index across other african countries over the same period, it was apparent that nigeria s tax. The study is therefore significance to the studies in the subject of income tax administration in nigeria because if further helps in shading light and some relevant concepts. Application of income tax administration provisions.
The national tax policy is an initiative of the federal government of nigeria which is being. 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. Tax automationcomputerization will equally make tax filling and payment seamless, which in turn will spur voluntary compliance and increased revenue generation by. Payment of tax by citizens, both individual and corporate, has never been easy, especially in a country like nigeria, where corruption and impunity hold sway. The difficulties and prospects of tax administration in nigeria a case study of the abia state board of internal revenue. Although there are specific provisions in the tax laws, especially under the firs establishment act 2007 for tax refunds, these provisions are yet to be fully functional. The study examines the administration of companies income tax in nigeria. This study analyses the relevance and the problems of value added tax vat in nigeria.
This was a moderate increase from the figures reported in 2016 5. Pdf the impact of tax administration on revenue generation. The federal executive council, the highest executive decision making organ in nigeria, yesterday approved a new national tax policy for the country. The effect of tax administration on revenue generation in. Real estate investment companies approved by the securities exchange commission to operate as a real estate investment scheme in nigeria will be exempt from income tax on rental income and dividend income earned in a financial year will be exempt from income tax provided that at least 75% of such income are distributed within 12 months. Tax compliance challenge in nigeria accounting by choice.
It is indeed, a vital platform for optimizing revenue generation by the. They are expected to work together in order to achieve the economic goal of the nation. The federal board of inland revenue is responsible for administration and collection of taxes on behalf of the federal government of nigeria. 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 bill also seeks to provide clarity and efficiency in the administration of the individual income taxes in nigeria. Taxation patterns throughout history are largely explained by administrative consideration. Bird, tax policy and economic development baltimore. A connected taxable may take advantage of the safe harbour provisions if. Tax identification number tin in nigeria, every citizen of nigeria working with the government, the private sector or owns. Taxes in nigeria can be levied on citizens by tax authorities depending on the type of tax involved. Aug 20, 2016 the prospect of tax administration ranges from increase in tax yield, new revenue opening, and buoyancy in government, which will enhance government ability to meet up with expenditure. This is approved for students in accountancy business computer science economics engineering arts.
Impact of tax administration on government revenue citeseerx. The policy will now be endorsed by the national economic council to recognize the federal system of government given the application of the policy to all tiers of government. The oil is an exhaustible and dwindling resource, while taxation is. Development of tax law, administration and practice is a joint and several responsibility of the. The importance, how to, effect causes relationship, comparison, history, role. An overview of national tax policy 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. This includes rental income on both real and personal property. 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 structure of any economy tends to vary substantially according to the level of development reflecting the availability of tax bases and. There should be appropriate funds set aside out of tax collected to cater for tax refunds both at the federal and state levels and tax authorities should be more. Tax credit allowable against tax payable on income derived from outside nigeria. Tax reform and administration in nigeria pdf download. However the level at which the capital gain tax administration in nigeria tend to achieve its desired goals and objectives depends mostly on the tax office and the company that is operating in each state, also when an individual or company is been taxed by the federal board of inland revenue fbir such taxpayer is meant to give an accurate. Difficulties and prospects of tax administration in nigeria. This study a nalyses the impact of non oil tax revenue on economic growth from 1993 to 2012 in nigeria. A survey of vatable nigerian organizations, firs staff and the publics was conducted to gain insights into. The study examined the issues and challenges inherent in the nigerian tax system.
This paper attempts to look at the nigeria tax administration and its capacity to. The purpose is to further enhance the process of tax collection and administration in nigeria. The tax system in nigeria is made up of the tax policy, the tax laws and the tax administration. Who technical manual on tobacco tax administration. Revenue generation and tax administration in nigeria 1domma, sunday o. An overview of national tax policy and administration in. 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. The ntp is a deliberate effort towards entrenching a robust and efficient tax system. People have been voted out of office because of tax. Individual taxpayers attitude and compliance behaviour in nigeria. Visit our tax blog to download a copy of the revised national tax policy. However, when compared with the same index across other african countries over the same period, it was apparent that nigerias tax revenue generation was significantly low. Assessment of capital gain tax administration in nigeria. Tax compliance, attitude, income tax administration.
Taxation in nigeria plus history of taxation in nigeria. It is established under section 85 of the personal income tax. Get free research paper on assessment of capital gain tax administration in nigeria. Administration of current taxes in nigeria vanguard news. The oil is an exhaustible and dwindling resource, while. Explanatory notes on withholding tax administration in nigeria. Who technical manual on tobacco tax administration who. 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. Aug 09, 2017 payment of tax by citizens, both individual and corporate, has never been easy, especially in a country like nigeria, where corruption and impunity hold sway. The study examines the effect of tax avoidance and tax evasion on personal income tax administration in nigeria. Overview of the national tax policy and its implication for tax administration in nigeria.
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. Government, tax administrators, practitioners and academics alike. Download fulltext pdf download fulltext pdf effect of tax administration on revenue generation in nigeria. Methods of income tax would provide means of making amendment where necessary for efficiency and effectiveness in the country. 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. Value added tax in nigeria how to calculate vatable. The researcher, in the final analysis drew a lasting conclusion, some of which are. The nigerian tax system has been taken through several reforms and modifications.
Impact of tax administration on government revenue in a. Case study of federal inland revenue service firsogun state branchproject topics and materials in nigeria. Most of the laws in the compendium are contained in the various volumes of the laws of the federation of nigeria. The nigerian tax system has undergone several reforms geared at enhancing tax collection and administration with minimal enforcement cost. 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. Tax policy, tax legislation and tax administration. The administration of tax in nigeria is vested in the various tax authorities depending on the type of tax under consideration. Jul 11, 2015 the researcher, in the final analysis drew a lasting conclusion, some of which are. Tax policy forms the basis for tax laws while tax administration is the implementation of the tax laws. Tax compliance barriers and internally generated revenue. The study employed secondary data and was based on. Musgrave 1969, have also stressed the importance of tax administration issues. The administration of tax is very important to any government as it is the.
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. Tax reform and administration in nigeria with abstract, chapter 15, references and questionnaire. The value added tax act in this act referred to as the principal act is amended as set out in this act. Transfer pricing guidelines for multinational enterprises and tax administrations, transfer pricing country profiles, business profit taxation, intangibles, this 2017 edition of the oecd transfer pricing guidelines incorporates the substantial revisions made in 2016 to reflect the clarifications and revisions agreed in the 2015 beps reports on actions. Unfortunately, we are far behind on tax law reform in nigeria as the last time any business tax legislation was enacted or. Challenges and prospects, a case study of lagos state board of internal revenue service, largest undergraduate projects repository, research works and materials. All of these are expected to work together in order to achieve the economic goal of the nation. Such authorities are the joint tax board, which is the apex unifying body for all tax authorities in nigeria. They note that modern tax structure development has generally been characterized by a shift from excise, customs, and property taxes to corporate income and progressive i internal revenue service 1996. 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. Even in developed countries, where tax compliance is the norm, issues involving taxation are hotly contested.
National tax policy chartered institute of taxation of nigeria. Relevant tax authority may assess and charge tax on the turnover of a business, etc. Best accounting software for small business owners in nigeria. Tax administration and revenue collection functions are performed by different. Chapter one of tax reform and 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. Tax compliance challenge in nigeria accounting by choice abc. Pdf the impact of tax administration on revenue generation in. Section 1 1 of cita vested the administration of the taxation of profit of incorporated companies to firs which is the operational arm of fbir. Download undergraduate projects topics and materials accounting, economics, education. Tax administration self assessment regulations 2011.
Impact of information technology on tax administration in. Nigerian tax authorities must continue to implement. According to the presidential committee on national tax policy 2008, the central objective of the nigerian tax system is to contribute to the. The impact of tax administration on revenue generation in gombe state, nigeria. It is a clear statement on the principles governing tax administration and revenue collection. Income taxes are important source of revenue to government in both developing.
In january, 1993, the then government agreed to introduce vat by the middle of the year. Oecd transfer pricing guidelines for multinational. Income tax administration in nigeria myschooltrick. Pdf issues and challenges inherent in the nigerian tax system.
Three research questions were formulated for the study. Administration of the tax 1 the tax shall be administered and managed by the federal board of lnland revenue in this act referred to as the board. Companies and allied matters act arrangement of sections part a companies part i corporate affairs commission section 1. However, this much needed prospects are not feasible because tax administration is plagued with many problems. Firs and billed to have been launched at pilot offices, this. The prospect of tax administration ranges from increase in tax yield, new revenue opening, and buoyancy in government, which will enhance government ability to meet up with expenditure. The government is also seeking for a way to incur minimal cost in the process of enforcing tax on nigeria s.
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