Thus, taxation is by far one the most significant source of revenue for the. The impact of taxation as an aid to economic development. It is good to note that no tax succeeds without the taxpayers cooperation. The general objective of this study is to examine the impacts of value added tax on revenue generation in nigeria. Marginal effective tax rate metr summarises the effect of the complicated tax code on an incremental investment and shows the impact of the tax system on the. The present s tudy had been aimed at filling the gap and will. Theories of taxation benefit theory cost of service. Department of commercial law ahmadu bello university, zaria, kaduna, nigeria email. Under current nigerian law, taxation is enforced by the 3 tiers of government, i. For the purpose of this study, the researchers would be concerned with the impact of taxation on nigeria economy. The impact of taxation as an aid to economic development includes abstract and chapter one, complete project material available the impact of taxation as an aid to economic development in edo statea case study of oredo local government area, edo state, nigeriaproposalthe research work will discuss in detail the impact of taxation as an aid to. The main objective of the study is to investigate the impact of taxation revenue on nigeria economic growth. Taxation in nigeria plus history of taxation in nigeria. The recent reforms include the introduction of tin, unique taxpayers identification number, automated tax system that facilitates tracking of tax positions and issues by individual taxpayers, epayment system which enhances smooth payment procedure.
However, apart from the southeastern nigeria, where this happened, the introduction of taxation in other part of the country marks the. Are changes in the social welfare function necessary. Direct taxation accounted for about 74% of the total tax revenue. Pdf nigeria is governed by a federal system, hence its fiscal operations also adhere to the. Taxation and developing countries training notes september 20. The economists have put forward many theories or principles of taxation at different times to guide the state as to how justice or equity in taxation can be achieved. Pdf impact of multipletaxation on competitiveness in nigeria.
Project topic on the impact of taxation on nigeria. A radical shift to indirect taxation, given the low cost of. Outlook and impact of changes in nigeria taxation landscape. Unfortunately, we are far behind on tax law reform in nigeria as the last time any business tax legislation was enacted or. Activities of nonnigerian companies, which would attract tax in nigeria and other special issues, are spelt out in the laws. Impact of tax administration on government revenue in a. Chelliah 1989 observed that an increase in indirect taxation compared to direct taxation reduces economic growth more than direct taxation does. The branch rate column includes the corporate tax rate applicable to branches. The impact of taxation as an aid to economic development includes abstract and chapter one, complete project material available the impact of taxation as an aid to economic development in edo statea case study of oredo local government area, edo state, nigeria proposalthe research work will discuss in detail the impact of taxation as an aid to economic development in edo state. A taxpayer may be liable to nigerian taxation, either because he is resident in. Outlook and impact of changes in nigeria taxation landscape for 2020. It then provides an overview of the principles underlying corporate income tax, focusing primarily on the taxation of crossborder income both. Thus taxation is by far the most significant source of revenue for the government nigeria regard payment of tax as a means whereby government raises revenue for herself at the expense of their sweat.
It requires clear perception of fiscal terms and concepts as well as. History of taxation in nigeria dates back to even when the name nigeria wasnt coined. Pdf corporate tax and profitability of deposit money. The first need of any modern government is to generate enough revenue which is indeed the breath of its nostrils.
Annual reports and chartered institute of taxation of nigeria journal. Taxes should be collected effectively and fairly, both in equitable and monetary terms, for our benefit, so as to ensure our desired growth and development. Taxes may be put into classes, depending on the relationship between the tax base which is the total amount of money from which a particular proportion must be transferred to the government and the tax rate which means that proportion of the tax base which must be paid in tax to the government. The distribution of expenditure tax burden before and after tax reform. Taxation is a major source of government revenue all over the world and governments use tax proceeds to render their traditional functions, such as. O teriba refers tax incidence as the effect and where the burden of it finally rest. In addition to the printed version of the wwtg, individual country taxation guides such as this are available in pdf format which can be downloaded from the pkf website at. Example of direct taxes are company income tax,capital gains tax etc. Outlook and impact of changes in nigeria taxation landscape for 2020 03 contents 05 nigerias finance act 2019 19 mutual agreement procedure and claiming tax bene. Governments at all levels, which has continued to impact negatively on the investment climate in nigeria and lack of both accountability for tax revenue and.
Challenges with taxation system in nigeria the nigerian. Examples are turnkey projects, allocation of income and expenditure between the foreign company and its branch in nigeria, transfer pricing etc. One of the functions of management in an organization is control. Local government fiscal operations in nigeria, by akpan h. Pdf nigeria is africas most populous country and second largest economy after south africa. 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. Tax policy reforms in nigeria unuwider united nations university. An example of indirect taxes are value added tax,excise duties,stamp duties. Introduction to taxation history of taxation principles of an optimal tax system single versus multiple tax systems classification of taxes and tax rates impact incidence and tax shifting, lax shifting theories taxable capacity. Evidence of corruption and the influence of social norms. He differentiated between formal and effective incidence of a tax. Assessment of value added tax and its effects on revenue generation in nigeria onaolapo, adekunle abdulrahman. What we mean here is some of this taxes are referred to as direct tax while others are referred to as indirect taxes.
The relationship between indirect taxation and economic growth has been examined severally by different researchers. In nigeria, nobody can dispute the fact that though this taxes are been collected, they are. Vat incidence is on the final consumer vat is a multistage tax jones 2003 also describes vat as a tax levied at. Taxation of individuals 7 income liable to tax 7 resident individual 7 nonpresence of an individual in liberia 7 taxable income 7 annual tax rates resident individuals 8 income from employment 8 noncash benefits 9 tax year individuals 9 social security 9 corporate tax 11 tax rate 11 resident criteria companies 11. Do the existing strategies for tax collection have any significant impact on the revenue collected in lagos state and nigeria. Identify the effect of tax revenue on labour force lf in nigeria. Introduction to taxation history of taxation principles of an optimal tax system single versus multiple tax systems classification of taxes and tax rates impact incidence and tax shifting, lax shifting theories. This paper concentrates on indirect tax incidence as these taxes constitute an. Taxation is a compulsory but nonpenal levy by the government through its agent on the profits, income, or consumption of its subjects or citizens. I nonresident persons tax office nrpto which will handle all tax affairs of nonresident persons individuals or corporate has been established 2.
Impact of taxation revenue on economic growth of nigeria with references. It was found that the reallocation of government expenditure to education sector is important in determine economic growth and the. Oct 06, 2017 despite the number of changes nigeria has made to its tax system in the past, there is still a very long way to go and the current situation of things is a nono. Alternative minimum tax of 1%3% of gross income applies. The incidence of taxation according the david begg measures the find tax burden on different people and who ultimately pays the tax. 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. The mdg target for nigeria in terms of poverty reduction is to reduce the percentage of population living in relative poverty from 54.
The objective of this study is to investigate the impact of taxation on economic development of nigeria proxy by the gross domestic product gdp. In view of the foregoing, the firs hereby notify all nonresident persons operating in nigeria and the general public that. Taxes should be collected effectively and fairly, both in equitable and monetary terms, for our. Likewise, tax incidence, or who bears the burden of a tax, is not explicitly. Government, tax administrators, practitioners and academics alike. The impact of taxation on nigeria economy includes abstract and chapter one, complete project material available the impact of taxation on nigeria economy abstractthis research work was carried out in order to find out if actually there is any impact which taxation has on nigerian economy and the survey for this study is based on enugu state.
The legal framework and system of taxation in nigeria. Introduction globally, taxation is the nucleus and the path to development because it is one of the formidable options to generate revenue by government. Research hypotheses the following hypotheses are formulated for this study and are stated in null form. The chartered institute of taxation of nigeria chartered. The literature on corruption in nigeria nigeria is the most populous country in africa and a very important oil producer. This facilitates determining the optimal tax rate for a given level of. Taxation of individuals 7 income liable to tax 7 resident individual 7 nonpresence of an individual in liberia 7 taxable income 7 annual tax rates resident individuals 8 income from employment 8 noncash benefits 9 tax year individuals 9 social security 9. She defined tax incidence as the distribution of tax. At this time, it most farm produce and other primary goods.
Fundamental principles of taxation this chapter discusses the overarching principles of tax policy that have traditionally guided the development of tax systems. Challenges with taxation system in nigeria the nigerian blawg. The impact of taxation as an aid to economic development in. The incidence of tax in nigeria is borne directly or indirectly. During this time, the tax administrators then were the traditional chiefs tax agents. For years it has been struggling to decrease unemployment, income inequality and its dependence on oil. The burden of taxation falls more heavily on the lower income groups than on the higher income group. Based on international trade convention, every country is allowed to adopt laws, rules and regulations that govern its trade relationships with other countries in a way that enables it achieve the desired strategic objectives. To examine the relationship between value added tax and revenue generation in nigeria to establish the effects of value added tax on revenue generation in nigeria 1. This paper examines the incidence of indirect taxation in cameroon in 1983, 1996.
The increasing reliance on direct taxation as a tool for government fiscal policy may have accounted for the gradual decline in the inequality gap in nigeria, even though global emphasis is on indirect tax. Ascertain the effect of tax revenue on gross fixed capital formation gfcf in nigeria. The incidence of taxation udude 2005 discussed incidence of tax and conditions under which tax could be shifted from one person to another. Briefly discuss the three types of inventory in a manufacturing company on which management maintains effective control.
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. The nigerian tax system has undergone several reforms geared at enhancing tax collection and administration with minimal enforcement cost. 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. Direct taxation accounted for about 74% of the total tax revenue in the year 1980 in nigeria.
The recent reforms include the introduction of tin, unique taxpayers identification number, automated tax system that facilitates tracking of tax positions and issues by individual taxpayers, epayment system which enhances smooth payment procedure and. Impact of taxation revenue on economic growth of nigeria. Pdf corporate tax and profitability of deposit money banks. Taxation, imposition of compulsory levies on individuals or entities by governments. Based on international trade convention, every country is allowed to adopt laws, rules and regulations that govern its trade relationships with other countries in a way that enables it.
Project topic on the impact of taxation on nigeria economy. 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. Despite the number of changes nigeria has made to its tax system in the past, there is still a very long way to go and the current situation of things is a nono. Bringing taxation into social protection analysis and planning odi. The taxation revenue on nigeria economic growth comes to lime light considering the incidence of overdependent on oil revenue in nigeria. Thus accuracy in revenue projection is vital for devising an appropriate framework. Tax revenue has no significant effect on infant immortality in nigeria.