CRITICAL ANALYSIS OF TAX SECTOR REFORMS IN NIGERIA

CRITICAL ANALYSIS OF TAX SECTOR REFORMS IN NIGERIA

Introduction

The history of Taxation in Nigeria is traceable to the reforms initiated in the first decade of the 20th Century in Northern Nigeria. The High Commissioner of the Northern Protectorate, Sir Fredrick Lugard issued the Stamp Duties Proclamation 1903 and followed it with the Native Revenue Proclamation in 19061. The Native Revenue Proclamation 1906 systematized all pre-colonial taxes that existed in Northern Nigeria by defining taxable rates, procedures for assessment and collection as well as penalties for default. This made away with the arbitrariness that was the case in the pre-colonial era and introduced the four certainties essential in modern tax practice: what to pay, when to pay, where and who to pay to. In this Thesis, Federal Inland Revenue Service shall hereinafter be referred to as ‗the Service‘, the Federal Board of Inland Revenue shall hereinafter be referred to as ‗The Board‘. The Federal Inland Revenue (Establishment) Act 2007 shall hereinafter be referred to as the ‗FIRS Act‘.

The amalgamation of the Northern and Southern Protectorate to form the colonial federation of Nigeria in 1914 led to the Native Revenue Ordinance 1917, which was extended from the Northern territories to the Western2 and Eastern territories in 1918 and 1927 respectively. Since then, there has been a steady progress in that regime with various attempts to modernize, expand, reform and improve the process, procedure and sanctions inherent in the system of taxation in Nigeria. In 1943, the Nigerian Inland Revenue

Department was carved out of the Inland Revenue Department of British West Africa3. This department was later renamed the Federal Board of Inland Revenue under the Income Tax Ordinance, No. 39 (1958). This was followed by the Companies Income Tax Act, No. 22 (1961) which established the Federal Board of Inland Revenue (FBIR)4: the Act created a Body of Appeal Commissioners to resolve Tax-related disputes. In 1993, the Finance (Miscellaneous Taxation Provisions) Act No. 3 and decree No. 104 established the Federal Inland Revenue Service (hereinafter FIRS) as the operational arm of the FBIR and reviewed the functions of the Joint Tax Board (hereinafter JTB), respectively5. However, the history of Tax Administration in Nigeria changed dramatically in 2007 with the enactment of the Federal Inland Revenue Service (Establishment) Act, 2007 (hereinafter FIRS (Establishment) Act) and the granting of financial and administrative autonomy to the FIRS. The passage of the FIRS (Establishment) Act 2007 was an actualization of one of the several reform initiatives that arose from the recommendations of the Study and Working groups on Nigerian Tax System.

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THE LAND USE ACT OF 1978: APPRAISAL, PROBLEMS AND PROSPECTS

In the past, attempts have been made to engineer the reform process though without much progress. The Federal Government has made four separate attempts to reform the tax system. In 1978, a Task Force on Tax Administration headed by Alhaji Shehu Musa was set up by the Federal Government and achieved the following:6 introduction of withholding tax regime, imposition of 10% special levy on the excess profits of banks, imposition of 2.5% Turnover tax on Building and Construction Companies.

TOPIC: CRITICAL ANALYSIS OF TAX SECTOR REFORMS IN NIGERIA

Chapters: 1 - 5
Delivery: Email

Number of Pages: 70

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