AN EXAMINATION OF THE CONCEPT OF FISCAL FEDERALISM AND TAX LEGISLATION IN NIGERIA

AN EXAMINATION OF THE CONCEPT OF FISCAL FEDERALISM AND TAX LEGISLATION IN NIGERIA

Background to the study

From remote antiquity, tax as a fiscal instrument of regulation and control is a ―necessary evil‖ that societies have been compelled to stay with. At the time of Jesus Christ, there was an established tax system that led the people to ask him if he approved the payment of tax to the old Roman Emperor, who was the imperial lord of Jerusalem1. In other words, since the inception of statehood, tax has been an instrument for generation of revenue in running the state. Prior to the discovery of other sources of wealth creation like natural resources, science and technology, production and distribution of goods and services,; tax had been that loyal servant of the state.

In recent times, tax has become a viable source of revenue generation to states such that it has shown its capability of being the main revenue stay of some countries all over the world. ―Countries like Canada, the United States of America, the Netherlands and the United Kingdom are some 1examples of a tax based economy with their internal revenue generation being over 50% of their revenue base‖2. States3 are beginning to accept the reality that taxation is a very good avenue for blocking the shortfall from funds transmitted from the Federation Account.4

The Black‘s Law Dictionary5 defines tax ―as a reliable portion of the property and labour of the individual citizens, taken by the nation in the exercise of its sovereign rights for the support of government, for the administration of the laws and as the means for continuing in operation, the various legitimate functions of the state.‖

The New Shorter Oxford English Dictionary6 defines tax as ―a compulsory contribution to the support of government levied on persons, property, income, commodity, transactions etc, usually at a fixed rate mostly, proportionate to the amount on which the contribution is levied.‖ Taxation is the process of compulsory exaction of the money by a public authority from individuals and corporate bodies, such monies being for public purposes7.

From the above definitions, we can safely say that taxes are compulsory payments levied by the government on the people (i.e. governed) so as to create revenue for the running of the apparatus of government and the provision of social amenities to the citizens of the state. They are the contributions by the people to the general revenue pool of the government.8

Tax policy on the other hand is the planned system of a particular country for purposes of the implementation of its tax regime. This policy affects micro and macro-economic behaviours of the citizens of the country. It comprise policies as to who to tax and how much to tax these persons. It is the tax policy that determines whether it targets, the rich, middle class or the low income earners. The decision to target each of these groups for tax purposes also have its own advantages and disadvantages.

TOPIC: AN EXAMINATION OF THE CONCEPT OF FISCAL FEDERALISM AND TAX LEGISLATION IN NIGERIA

Chapters: 1 - 5
Delivery: Email

Number of Pages: 78

Price: 3000 NGN

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