AN EXAMINATION OF TAX ADMINISTRATION AND ENFORCEMENT MECHANISMS UNDER THE FEDERAL INLAND REVENUE SERVICE ACT, 2007

AN EXAMINATION OF TAX ADMINISTRATION AND ENFORCEMENT MECHANISMS UNDER THE FEDERAL INLAND REVENUE SERVICE ACT, 2007

Background to the Study

One instrument use as a key to unlocking the resources required for public investment and infrastructural growth is tax. The process of levying and collection of tax i.e. taxation is a very complex and highly dynamic system with constant changes in the economic environment where it operates, hence the need to review from time to time the instruments regulating the levying, collection, administration and enforcement of tax.1

In Nigeria, what added to the complexity of the system is the Federal character of the country. Under a Federal system like Nigeria, powers are shared between the central and state governments which also include power to impose or levy tax within the jurisdiction of the government concern. In Nigeria the power of levying and collection of taxes are shared between Federal and State governments2, and therefore, administration of tax is made at two tiers of governments i.e. by the Federal Inland Revenue Services at Federal level and various States Board of Internal Revenue at State level3. This division occasionally brings about disagreement between the two tiers of government as to which government should collect what tax? 4This of course affected the smooth running of the system in the country.

Another glaring problem in Nigerian tax system is the neglect by the successive governments of various sources of government revenue. And with the discovery of oil in 1970s, the Nigerian revenue base became dominated by oil revenue. The system was equally characterized by unnecessarily complex, distorted and largely in-equitable tax laws that has no practical application in the informal sector that dominated the economy. The whole system in the Nigerian taxation system as represented by mechanisms for administration and enforcement of tax was to say the least, inefficient and outdated.

Since the amount accrued to the government for its support depends largely on how efficient the machineries for administration and enforcement of taxes are, it was deemed necessary that the legal framework under which tax is levied and collected (administered) needs to be re-visited and made effective so as to be able to achieve its purpose. It was in a quest for this reform that in 2007, the National Assembly enacted the Federal Inland Revenue Services Act5 as a new legal regime for administration and enforcement of tax laws in Nigeria. The Federal Inland Revenue Service Act (hereinafter referred to as FIRS Act or the Act) established the Federal Inland Revenue Services (FIRS) and its Management Board (the Board) as autonomous bodies with power to administer and enforce tax laws in Nigeria6, while the Tax Appeal Tribunal (TAT) established under the Act7, is to operate as an adjudicating body within the system.

This research is undertaken to examine whether the new law is capable of achieving its objective of improving tax administration and enhancing government revenue thereby improving the standard of living of Nigerians.

TOPIC: AN EXAMINATION OF TAX ADMINISTRATION AND ENFORCEMENT MECHANISMS UNDER THE FEDERAL INLAND REVENUE SERVICE ACT, 2007

Chapters: 1 - 5
Delivery: Email

Number of Pages: 75

Price: 3000 NGN

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