The basis for the taxation was the islamic religion. This study examined the impact of etaxation on nigerias revenue and economic growth. Highlighted below are some of the issues still faced by the nigerian taxation system and possible way forward. Federal government, tax revenue, nigeria, revenue collection, firs. This form of tax is reported to be one of the most stable sources of revenue to governments however. 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.
The ordinary least square method of multiple regression analysis was used to analyze the data. Under current nigeria law, taxation is enforced by the tiers of government that is local, state and federal government. Sep 05, 2018 personal income tax amendment act, 2011 pitam is the principal act for the taxation of employees in nigeria. 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 credit allowable against tax payable on income derived from outside nigeria. Avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital gains belgium original 20111989 03121994 2 agreement.
A foreigner holding a nigerian residence permit cerpac is also deemed to be a tax resident. The realities of taxation of taxation in the informal sector. Tax policy forms the basis for tax laws while tax administration is the implementation of the tax laws. Nigeria currently has dtts with thirteen countries namely. Double taxation relief between the federal republic of. Taxation and fiscal regulations in nigeria nigerian law guru. As events unfolded, before the colonization period in nigeria, the tax system was traced to the northern parts of the country. Nigeria fiscal guide 20172018 income tax generally, all companies other than those engaged in petroleum operations are subject to companies income tax on their taxable profits.
May 18, 2018 although the reason for the near failure of taxation in nigeria is diverse and multifaceted, the legal framework for taxation is the major factor that inhibits taxation. The petroleum profit tax is subject to any resident company or person in charge of a nonresident company who are exploring for petroleum or producing it. Examples of multiple taxes are company income tax, education tax, etc. The nigerian tax regulation defines a nigerian resident as an individual who is living in nigeria for more than 6 months a year. The choice of the study period provides an opportunity for. 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. While competitive enough to bolster the countrys appeal to foreign investors and skilled expats, nigerias tax system is also tasked with the responsibility of providing the government with enough resources to finance the countrys development company tax and. The administration of tax is vested in various tax authorities depending on the type of tax under consideration. This act regulates the personal income tax throughout the federation. The aim of this study was to investigate on taxation and its effects in the nigeria economy.
In addition to the printed version of the wwtg, individual country taxation guides are available in pdf format which can be downloaded from the pkf website at. Nigeria pursuant to articles 287 and 294 of the convention. The study period spans economic cycles for about 66 percent of the life of the country, since attaining political independence in 1960. Many companies in the past have lost a huge fraction of their profits to fines for defaulting tax payments or evading taxes. Pdf nigeria is governed by a federal system, hence its fiscal operations. The effect of taxation on nigeria economy project topics. A taxpayer may be liable to nigerian taxation, either because he is resident in nigeria or because the source of his income is located in. Te tax law regulating taxation of individual is the income tax management act itma of 1961 which was replaced with the personal income tax decree pitd 104 of 1993. Tax compliance barriers and internally generated revenue in.
Impact of etaxation on nigerias revenue and economic. This study examines the impact of taxation on investment and economic growth in nigeria from 19802010. 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. Despite the potentials of taxation as a dynamic tool for sustainable national development, nigeria tax. Personal income tax pit is a compulsory tax charged on the income earned by an individual.
Investment in nigeria 37 a right to the exclusive use of that trademark for a period of seven 7 years, which may be renewed from time to time. Introduction taxation is a main source of revenue to governments across the world. Under current nigerian law, taxation is enforced by the 3 tiers of government, i. Taxation books taxation sa taxation pdf taxation p6 bpp taxation taxation uk taxation ngo taxation what is taxation f6 taxation taxation law what is taxation all about taxation in png taxation book pdf taxation law by kailash rai corporate taxation advanced taxation pdf business taxation taxation definition.
Mar 21, 2018 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. 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. Tax and taxation in nigeria europeanamerican journals. Impact of taxation revenue on economic growth of nigeria. Property tax is generally a tax imposed by municipalities upon owners of real property within their jurisdiction based on the value of such property. The nigeria tax system, like any tax system, is a tripartite structure which comprises of. 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. Government, tax administrators, practitioners and academics alike.
Taxation in nigeria plus history of taxation in nigeria. Business or trade only partially carried on or deemed to be carried on in nigeria. All the companies registered in nigeria which earn any capital gains or gains on the disposal of any form of assets whether it is in nigeria or not are liable to capital gains tax. Avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains the government of the federal republic of nigeria government of the united kingdom of great britain and northern ireland. Taxation in nigeria understanding nigerian tax system. The ordinary least square method of multiple regression analysis was used to. Introduction amalgamation in 1914 of the north and south protectorate to form the territory now called nigeria.
One of the objective carried out by the researcher was to examine peoples perception on taxation. 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. This, in relation to what they do, where they live or any other issues reconized by the law. Federal inland revenue service firs we do our best to provide accurate and up to date information. Relevant tax authority may assess and charge tax on the turnover of a business, etc. Taxation in nigeria understanding nigerian tax system oasdom. Personal income tax amendment act, 2011 pitam is the principal act for the taxation of employees in nigeria. The sale of real estate properties is subject to a 10% tax on the gains. Tax identification number tin in nigeria, every citizen of nigeria working with the government, the private sector or owns. The realities of taxation of taxation in the informal. Double taxation relief between the federal republic of nigeria and the united kingdom of great britain and northern ireland order under section 451 commencement.
Y to ease the complications in the administration of taxation in the informal sector in enugu state for all players in the sector, especially smallscale artisans, traders, including women and subsistence businesses. 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. 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. 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. Considerable emphasis and incessant debates has been made on the importance of tax policy and administration in enhancing tax revenue. Desiring to conclude an agreement or the avoidance of double taxation and the. Citn was formed by the government for the purpose of training and educated professionals. The legal framework and system of taxation in nigeria. Companies resident in nigeria are assessable to tax on their worldwide. For taxation to make the desired impact on the economic development of nigeria as the major source of government revenue. Overview of personal income tax in nigeria explained. This study therefore examined implication of tax and taxation on the construction sector in nigeria with a view for industry.
Unfortunately, we are far behind on tax law reform in nigeria as the last time any business tax legislation was enacted or. During this time, the tax administrators then were the traditional chiefs tax agents. Capital gains tax is calculated and submitted with companies income tax to firs through designated bank. 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. Pdf impact of etaxation on nigerias revenue and economic.
The chartered institute of taxation of nigeria is the professional certified tax administrators in nigeria. In nigeria, the oecd model has served as the basis on which most of the current double taxation treaties dtts with other countries have been formulated. Basic principles of taxation in nigeria tax nigeria mondaq. Although the reason for the near failure of taxation in nigeria is diverse and multifaceted, the legal framework for taxation is the major factor that inhibits taxation. Introduction globally, taxation is the nucleus and the path to development because it is one of the formidable options to generate revenue by government. This simply means paying similar taxes on the same or almost similar tax base. A radical shift to indirect taxation, given the low cost of. Taxation is not a new word in nigeria or the world as a whole. Aug 09, 2016 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. Kpmg confidential nigeria fiscal guide 20172018 1 introduction. 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 e taxation on nigeria s revenue and economic growth. New forms of taxation will be developed, and they will be able to change the face of nigeria. Best accounting software for small business owners in nigeria. At this time, it most farm produce and other primary goods. The emirs created a system of taxes throughout the north. Under current nigerian law, taxation is enforced by the. In nigeria, nobody can dispute the fact that though this taxes are been collected, they are.
Given that the purpose of introducing electronic tax system is to improve revenue collection which will in turn improve the countrys economic growth, the. Pdf an assessment of the prospects of property tax. This also includes any liquidator, receiver, or agent of liquidator or receiver of any company carrying on petroleum operations in nigeria. In nigeria, taxation has been in existence even before the coming of the colonial men or the british. The institute of chartered accountants of nigeria ican was established by act of parliament no. Impact of etaxation on nigerias revenue and economic growth. The united kingdom, the netherlands, canada, south africa, china, philippines. Tax policy, tax legislation and tax administration. To determine the effects of taxation on employment and salaries of working in nigeria. Pdf taxation, exchange rate and foreign direct investment.
Government with each having its sphere clearly spelt. 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. In developing this argument, this thesis gives an overview of oil and gas taxation in both jurisdictions and examines the possibility of transferring laws between nigeria and canada by. 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. This system is meant to reduce physical interaction between tax payers and the firs. It requires clear perception of fiscal terms and concepts as well as. Taxation books taxation sa taxation pdf taxation p6 bpp taxation taxation uk taxation ngo taxation what is taxation f6 taxation taxation law what is taxation all about taxation in png taxation book pdf taxation law by kailash rai corporate taxation advanced taxation pdf business taxation taxation definition cost and taxation. Obviously, everything about the nigerian taxation cannot be covered in this article, so try to click the links provided on certain text to. History of taxation in nigeria dates back to even when the name nigeria wasnt coined. Department of commercial law ahmadu bello university, zaria, kaduna, nigeria email. The main objective of the study is to investigate the impact of taxation revenue on nigeria economic growth.
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