Income tax in nigeria is levied at a progressive rates capped at 24%. Babatunde fowler delivered, on 6 september 2018, a keynote address at a stakeholders meeting on tax administration and national revenue. The administration of tax in nigeria is vested in the various tax authorities depending on the type of tax under consideration. The act administered by both federal inland revenue service and the states internal revenue service. Tax administration self assessment regulations 2011. An overview of national tax policy and administration in nigeria. All of these are expected to work together in order to achieve the economic goal of the nation. It is established under section 85 of the personal income tax act, amendment 2011. Basic principles of taxation in nigeria tax nigeria mondaq. Vat was proposed and a committee was set up to carry out feasibility studies on its implementation. 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. Such authorities are the joint tax board, which is the apex unifying body for all tax authorities in nigeria. 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. The study investigated the role of tax administration in revenue generation in nigeria between 1994 and 2015. 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. Federal inland revenue service deals with the taxation of capital gains arising from the deposal of property by corporate entities while the. Administration of current taxes in nigeria vanguard news. Tax policy, tax legislation and tax administration. Unfortunately, we are far behind on tax law reform in nigeria as the last time any business tax legislation was enacted.
The taxable period is the fiscal year, which runs from 1 january to 31 december. 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. Capital gains tax administration in nigeria is regulated by the capital gains tax act cap c. Government, tax administrators, practitioners and academics alike. The tax structure of any economy tends to vary substantially according to the level of development reflecting the availability of tax bases and. Three research questions were formulated for the study.
The study period spans economic cycles for about 66 percent of the life of. The nigerian tax system has undergone several reforms geared at enhancing tax collection and administration with minimal enforcement cost. Companies may create a tax profile with the firs and file their returns electronically once the system becomes fully functional. 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. Value added tax in nigeria how to calculate vatable. Best accounting software for small business owners in nigeria. Download undergraduate projects topics and materials accounting, economics, education.
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. Personal income tax amendment act, 2011 pitam is the principal act for the taxation of employees in nigeria. 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. Development of tax law, administration and practice is a joint and several responsibility of the.
As such, it is required to register for cit and file its tax returns. The study will address the link between tax administration and governance in the specific cases of lagos. Generally, tax is assessed in accordance with some reasonable rules of. 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. 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. Nigeria updated october 2017 nigeria transfer pricing country profile updated october 2017. Nigerias firs provides updates on tax administration in nigeria. Tax administration in nigeria is vested in the three tiers of government. The executive chairman of nigerias federal inland revenue service firs, mr. 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. Section 4 examines the effects of fiscal measures on the economy in. Unfortunately, the nigerian tax system is faced with challenges, such as loss of revenue. 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.
Impact of tax administration on government revenue citeseerx. Firs and billed to have been launched at pilot offices, this. 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. It brings together commissioners from 53 oecd and non oecd. It is a clear statement on the principles governing tax administration and revenue collection. Pdf the thrust of this study is to examine the effect of tax administration on revenue generation in nigeria. The executive chairman of nigeria s federal inland revenue service firs, mr. It is regulated by the vat act and the vat amended. 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. Educational tax is also prepared and submitted with annual self assessment. Taxes in nigeria can be levied on citizens by tax authorities depending on the type of tax involved. 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.
An examination of the laws on tax reliefs and exemption in. The forum on tax administration fta was established in july 2002 to develop a global response to tax administration issues. Global tax alert nigerias firs provides updates on tax administration in nigeria new. It was the view of popoola 2009 that nigerian tax administration and practice be. The study uses that from federal inland revenue services firs on petroleum. Tax administration tax evasion uganda jel classification. Taxation, revenue allocation and fiscal federalism core. The study examines the administration of companies income tax in nigeria.
In january, 1993, the then government agreed to introduce vat by the middle of the year. Tax administration and revenue collection functions are performed by different. Companies are required to register for tax and file their audited accounts and tax computations with the firs within six months of their financial yearend on a selfassessment basis or 18 months after incorporation whichever comes first. The purpose is to further enhance the process of tax collection and administration in nigeria.
Tax administration and revenue generation of lagos state. Taxes payable to the federal government are administered by the. 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. Rates of withholding tax there is an obligation on the payer either resident or nonresident of. The nigerian tax system has been taken through several reforms and modifications. 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. All the companies registered in nigeria, in other words, all the companies subject to companies income tax cit are also liable to educational taxedt. Tax is a medium which countries across the globe depend upon so as to carry out the mandate of their citizens. The firs is vested with the power of administration and management of vat in nigeria. 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.
Tax identification number tin in nigeria, every citizen of nigeria working with the government, the private sector or owns. The national tax policy is an initiative of the federal government of nigeria which is being. 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. Impact of tax administration on government revenue in a. A survey of vatable nigerian organizations, firs staff and the publics was conducted to gain insights into. 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. 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. Activities of nonnigerian companies, which would attract tax in nigeria and other. Most of the laws in the compendium are contained in the various volumes of the laws of the federation of nigeria. Administration of taxes in nigeria tax nigeria mondaq. Master file consistent with annex i to chapter v of the tpg. 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.
Understanding withholding tax wht in nigeria completefmc. A mixed research design was used, and data was collected through survey and. 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. Challenges and prospects, a case study of lagos state board of internal revenue service, largest undergraduate projects repository, research works and materials. 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.
Petroleum companies are required to file their returns of estimated tax within two. Capital gains tax administration in nigeria tarababir. The fta aims to influence the environment within which tax systems operate. The sale of real estate properties is subject to a 10% tax on the gains. Section 4 examines the effects of fiscal measures on the economy in the country. This study examines the determinants of tax administration efficiency. According to the presidential committee on national tax policy 2008, the central objective of the nigerian tax system is to contribute to the. This study analyses the relevance and the problems of value added tax vat in nigeria.
Offences and penalties late filing of returns s 5535 failure to file tax returns attracts a penalty of. 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. Federal inland revenue service firs we do our best to provide accurate and up to date information. Application of income tax administration provisions. Tax policy forms the basis for tax laws while tax administration is the implementation of the tax laws. 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. Tax, simply is a charge imposed by governmental authority upon property, individual, or transaction, to raise money for public. Nigerias firs provides updates on tax administration in. 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. Here are the applicable rates for personal income tax in nigeria. The government is also seeking for a way to incur minimal cost in the process of enforcing tax on nigerias. This paper attempts to look at the nigeria tax administration and its capacity to reduce tax. 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 stakeholders meeting was aimed at charting the way forward for the.
The ntp is a deliberate effort towards entrenching a robust and efficient tax system. The tax system in nigeria is made up of the tax policy, the tax laws and the tax administration. An overview of national tax policy and administration in. The tax system in nigeria is made up of tax policy and tax laws, stratified into tax assessment, tax collection and tax administration. There is an unwillingness of the people to pay tax in nigeria.
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