Literature Review on Taxation in Nigeria

Abstract

This project documents what taxation means and what taxation entails in Nigeria. Nigeria has been considered among the nations in the world with high debt profile. The sources of revenue generated to finance the debt profile have not been fully harness, most especially the tax revenue among others that can be used to relief the debt and enhance economic growth. This has been a great source of concern by the academia, policy maker, and government. The goal of this project is to identify what both primary and secondary sources of law states about taxation. The Nigerian tax system is designed as a means of income generation. The three tiers of government have the responsibility of tax administration in Nigeria. Nigeria tax system is confronted with many issues and challenges such as multiplicity of taxes, bad administration, non-availability of database, tax touting, complex nature of the Nigerian tax laws, minimum tax, commencement, change of accounting date and cessation, and non-payment of tax refunds. The methodology used in this project is Doctrinal methodology as this research made us of both primary and secondary sources. For the primary sources this research used Federal Inland Revenue Service Act 2004 Companies Income Tax Act 2004 Value Added Tax Act 2004 for the secondary sources this research used the opinion of experts online journals case studies. Tax has been defined by many scholars in the past, it is a compulsory levy imposed by the government on the income of individuals and cooperation to generate revenue for running the activities of the government. Taxation is described it as a compulsory contribution by the government and it is concluded that even though taxpayers may receive nothing identifiable in return for their contribution, they nevertheless have the benefit of living in a relatively educated, healthy and safe society. However, the government ought to use this contribution to provide for a relatively safe and secure environment for the citizens. Taxation is defined as an enforceable contribution of money enacted pursuant to legislative authority. The way forward includes streamlining collection mechanism, ensuring good, effective and efficient tax administration, introduction of tax technology, tax awareness and communication, simplifying the tax laws and abolishing some, refund of taxes overpaid, independent of tax authorities (boards of internal revenue), addressing the issue of corruption among tax officials, strengthening of tax audit, establishing special courts to handle tax issues, and stiffer penalty for tax evasion and other tax offences.

Keywords: Economic growth, Tax administration, Tax awareness, Tax evasion, Tax laws