Taxation, revenue allocation and fiscal federalism core. Determinants of capital structure in nigeria article pdf available in international journal of innovation and applied studies 34. All of these are expected to work together in order to achieve the economic goal of the nation. Educational tax is also prepared and submitted with annual self assessment of companies income tax to designated bank. 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 in nigeria. Relevance of tax revenue resources to infrastructural. This page provides the latest reported value for nigeria personal income tax rate plus previous releases, historical high and low, shortterm forecast and longterm prediction, economic calendar, survey consensus and news. Nigeria as a nation with federal political structure has a fiscal regime that adheres strictly to the same principle, a fact which has serious implications on how the tax system is managed. Kayode naiyeju, chair of the federal inland revenue service firs in nigeria, provided useful insights into the design and administration of the. The nigerian tax system has undergone significant changes in recent times. There shall be 36 states in nigeria, that is to say, abia, adamawa, akwa ibom. Tax structure and economic growth in nigeria damian nwosu. Individuals, personal income tax ranged between 7 to 2% of taxable income imposed according to the income of citizens. Efficiency and effectiveness of nigerias tax system over the years has been faced.
Tax rates in nigeria are graduated across income bands, ranging from 724%. The tax system in nigeria is made up of the tax policy, the tax laws and the tax administration. The personal income tax rate in nigeria stands at 24 percent. Unfortunately, we are far behind on tax law reform in nigeria as the last time any business tax legislation was enacted or. Nonresident individuals, staff of the nigerian armed forces, officers of the nigeria foreign services, persons resident within the federal capital. Individuals resident in nigeria are to pay their taxes to the state\ tax office where they are resident on 1 st january of each year. However, for in the united states and united kingdom as far investment income such as dividends, interest, back as the second world war but only royalty and rent wht is the final tax especially introduced into nigerias tax regime in 1977.
Petroleum profit tax is a tax applicable to upstream operations in the oil industry as it is related to rent, royalties, margin, oil mining prospecting and. All nigerian tax residents are liable for income tax that is, employees with duties of employment performed wholly or partly in nigeria for up to six months per year. This study examines the tax structure and economic growth in nigeria. The sale of real estate properties is subject to a 10% tax on the gains. Tax structure refers to the share of each tax in total tax revenues.
Nigeria payroll and tax information and resources activpayroll. The purpose was to simplify the process so tax collection in nigeria. Tax policy, tax legislation and tax administration. The body was established in 1993 and it bases its decisions on salary structures on recommendations handed over since 1960 till present. All the companies registered in nigeria, in other words, all the companies subject to companies income tax cit are also liable to educational tax edt. Flaws of the withholding tax system in nigeria part 1. This is an automated tax system and it helps to track the tax position of every nigerian that has the tin and those who do not have are compelled to go for theirs in order to make tax tracking very easy. 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. Pdf this is a study of the properties of the nigerias tax system particularly the bases of the company income tax, value added tax and personal. In nigeria, income tax returns are prepared on preceding years basis and these returns are due for submission to the tax authorities within six months of the relevant yearend.
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. A detailed list of goods and services exempt from vat can be found in the first schedule of the vat act. An analysis of tax and oil revenue generation in nigeria and. This agency is saddled with the responsibility of deciding a realistic compensation system in the nigerian economy.
Tax policy forms the basis for tax laws while tax administration is the implementation of the tax laws. The study period spans economic cycles for about 66 percent of the life of. Trading economics members can view, download and compare data from nearly 200 countries, including more than 20 million economic indicators. Conceptual background tax revenue mobilization as a source for financing development activities in nigeria has been a. There was also a development levy, a flat charge imposed on every taxable citizen. Masters thesis from the year 2010 in the subject economics economic cycle and growth, grade. Nigeria shall be a federation consisting of states and a federal capital territory. Taxation in nigeria plus history of taxation in nigeria. A disaggregated empirical evidence using a time series data spanning from 1986 through 2012. These salary structures were established by the national salaries, incomes and wages commission, which is a body directly under the control of the presidency.
The secondhighest share of tax revenues in 2017 was derived from personal income tax 16%. Pdf this is a study of the properties of the nigerias tax system particularly the bases of the company income tax, value added tax and. It is the most important tax in nigeria in terms of it share of total revenue, contributing over 70% of government revenue and 95%. Taxation and fiscal regulations in nigeria nigerian law guru.
We lead the debate with tax authorities and governments around the world, changing the way we all think about tax. 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. The nigerian tax system has undergone several reforms geared at enhancing tax collection and administration with minimal enforcement cost. 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. Nigerian tax residents are taxed on all income sourced from nigeria, and all worldwide income.
The impact of capital structure on firms performance in. It has been used as a tax mechanism the taxpayer at the end of the year. This study examines the determinants of tax administration efficiency. Pdf nigeria is governed by a federal system, hence its fiscal operations also adhere to the same principle, a fact which has serious implications on. Nigeria is one indivisible and indissoluble sovereign state to be known by the name of the federal republic of nigeria. Payments are made to the federal government through the federal inland revenue service firs.
Pwc is the leading provider of tax services worldwide both in terms of the size and scope of our tax practice and our reputation. Activities of nonnigerian companies, which would attract tax in nigeria and other special issues, are spelt out in the laws. Companies may create a tax profile with the firs and file their returns. Administration of taxes the administration of tax is vested in various tax authorities depending on the type of tax under consideration. Several studies pertaining to tax reforms in nigeria have tied tax reform on economic growth undermining public generated revenue. It is also characterised by unnecessary complex, distortionary. The federal government of nigeria through its treasury circular ref. Effects of multiple taxation on the performance of small and.
Therefore, the income tax returns for an accounting year ended december 31, 2014, were due for submission by june 30, 2015. Data were sourced from central bank statistical bulletin and extracted through desk. The tax structure of any economy tends to vary substantially according to the level of development reflecting the availability of tax bases and. Impact of tax administration on government revenue in a. The corporate tax rate in nigeria stands at 30 percent. This study examined the relationship between tax structure and economic growth in. Nigeria imposes a value added tax vat on sales of goods and provision of services. Nigeria personal income tax rate 20112020 data 20212022. Government, tax administrators, practitioners and academics alike.
Nigeria pkf assurance, audit, tax, advisory and business. The recent reforms include the introduction of tin. Nigeria individual sample personal income tax calculation. On the whole, the ultimate goal of tax reform is the enhancement of public revenue generation. Unfortunately, the nigerian tax system is faced with challenges, such as loss of revenue. The study examines the administration of companies income tax in nigeria. However, for in the united states and united kingdom as far investment income such as dividends, interest, back as the second world war but only royalty and rent wht is the final tax especially introduced into nigeria s tax regime in 1977. Many citizens wonder whether there is any justification for the continuing deduction of taxes on their incomes or payment.
The study examined the impact of tax revenue on the nigerian economy. Vat is charged on most goods and services provides in nigeria and also on goods imported into nigeria. Examples are turnkey projects, allocation of income and expenditure between the foreign company and its branch in nigeria, transfer pricing etc. Sep 14, 2012 tax is a compulsory levy imposed by the government of a country on individuals and corporate entities in respective of return of service expected from that government. Pdf revenue implications of nigerias tax system researchgate. Ogebe, patrick and ogebe, joseph and alewi, kemi 27 march 20 online at mpra paper no. However, since the restoration of democracy and introduction of economic reforms, the country is growing at a fast pace.
Federal inland revenue service firs we do our best to provide accurate and up to date information. In nigeria, nobody can dispute the fact that though this taxes are been collected, they are. Nigeria corporate tax rate data, historical chart, and calendar of releases was last updated on february of 2020 from its official source. All the companies registered in nigeria, in other words, all the companies subject to companies income tax cit are also liable to educational taxedt. Any person or individual, corporate sole, organizations who consumes or buys any taxable product or service will have to pay a. State internal revenue offices administer personal income tax. The highest share of tax revenues in nigeria in 2017 was contributed by corporate income tax 45%. Tax is a medium which countries across the globe depend upon so as to carry out the mandate of their citizens. 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. 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. 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 is a compulsory levy imposed by the government of a country on individuals and corporate entities in respective of return of service expected from that government. Introduction to value added tax vat in nigeria it is a federal tax which is managed by the federal inland revenue service firs. The economy has stumbled for years due to political unrest, corruption and poor fiscal policies. With the tax system, there is faster and smother tax payment and processing. Firs has introduced efiling under the integrated tax. Nigeria using a disaggregated framework to account for the different sources of revenue in nigeria. According to the presidential committee on national tax policy 2008, the central objective of the nigerian tax system is to contribute to the. Revenue and expenditure profiles in nigeria the characteristics of the total government revenues and expenditures in nigeria are examined to support the econometric analysis in this work. Individuals resident in nigeria are to pay their taxes to the state\tax office where they are resident on 1 st january of each year. Taxation patterns throughout history are largely explained by administrative consideration. The rate for vat in nigeria is 5% and does not fluctuate. This study a nalyses the impact of non oil tax revenue on economic growth from 1993 to 2012 in nigeria.
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