AN EXAMINATION OF THE TAXATION OF MULTINATIONAL CORPORATIONS AND ITS LEGAL EFFECTS ON FOREIGN INVESTMENTS IN NIGERIA

AN EXAMINATION OF THE TAXATION OF MULTINATIONAL CORPORATIONS AND ITS LEGAL EFFECTS ON FOREIGN INVESTMENTS IN NIGERIA

BACKGROUND TO THE STUDY

The international multinational corporate taxation vis-à-vis foreign investments, together with issues of double taxation and non-adherence to corporate rules are some factors that have brought companies to ruins. The viability and health of corporations have direct bearing on a country‘s economic growth and revenue generation.

It is definite to state that taxation is the key to a sustainable development. This is because no government can survive without sufficient revenue to finance its activities. This explains why revenue generation is one of the basic objectives of taxation1. As a matter of fact, fiscal considerations are paramount in shaping development policies of a given economy either at micro or macro level. In his remark, Felix Frankfurter2 states the significance of tax thus: Taxation has always been the sensitive nerve of government. The enormous increase in the cost of society and the extent to which wealth is represented by intangibles, are putting public finance to its severest tests. To balance budgets, to pay for the cost of progressively civilized social standards, to safeguard the future and to divide these burdens with substantial fairness to the different interests in the community, strains to the utmost the ingenuity of statesmen.

Nigeria has many taxes through which sufficient revenue can be generated to meet government expenditure3. Some of these taxes include companies‘ income tax and petroleum profit tax among others4. These taxes are capable of generating sufficient revenue to finance the government activities if they are effectively administered and enforced. However, there is no gainsaying despite the fact that Nigeria has many companies and other taxable persons from whom revenue can be generated, the government is repeatedly complaining of the widespread incidence of tax avoidance and evasion5. Our tax system has not succeeded in achieving the goals of revenue adequacy and equity. Revenue authority attempts to generate too much revenue but ends up with little. A lot of reasons are responsible for the inadequate revenue generation. In the 1970s during the oil boom, the government depended much on oil revenue. Petroleum profit tax gained prominence at the expense of other taxes. The authority became relaxed to adequately harness other forms of taxes that would have boosted and complemented its oil revenue generation. This consequently brings about loops and slack in Companies‘ Income Tax Laws. It equally weakened the administrative and enforcement institutions of other non-oil taxes.

Apart from the fact that our corporation tax laws have not been overhauled and reviewed for a long period of time to make them more elegant and in tandem with the international best practices, their provisions are clumsy, unnecessarily verbose and complicated. This may increase the cost for tax payers to comply with their tax obligations. Besides, it is trite that for a tax to be justified at all, it must be found within the clear language of a statute6.

TOPIC: AN EXAMINATION OF THE TAXATION OF MULTINATIONAL CORPORATIONS AND ITS LEGAL EFFECTS ON FOREIGN INVESTMENTS IN NIGERIA

Chapters: 1 - 5
Delivery: Email

Number of Pages: 75

Price: 3000 NGN

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