TABLE OF
CONTENTS
Title
Page………………………………………………………….. i
Certification
………………………………………………………. ii
Dedication…………………………………………………………. iii
Acknowledgements……………………………………………….. iv
Table
of contents…………………………………………………… v
Table
of Cases……………………………………………………... viii
Table
of Statutes…………………………………………………… ix
Table
of Abbreviations…………………………………………….. x
Abstract…………………………………………………………….. xi
CHAPTER ONE
GENERAL
INTRODUCTION
1.1 Background of the Study……………………………………. 1
1.2 Statement
of the Problem………………………………….. 3
1.3 Objective
of the Study………………………………….. 4
1.4 scope
of the Study…………………………………………… 5
1.5 Significance
of the Study……………………………………. 5
1.6 Limitation
of the Study……………………………………….. 6
CHAPTER TWO
LITERATURE
REVIEW
2.1 Taxation; meaning;……………………………………..
2.2 History of Taxation……………………………………… 9
2.3 Origin
of Taxation in Nigeria
…………………………… 11
2.4 Nature
of Taxation…………..`………………………….. 6
2.5 Taxing
system, what is it? ……………………………… 20
CHAPTER THREE
TAXATION
POLICY IN NIGERIA
3.1 Methodology
………………………………………………. 32
3.2 Tax Jurisdiction
in Nigeria………………………………… 40
3.3 Challenges
of Taxation in Nigeria
……………………….. 48
3.4 Current
Taxation Reform in Nigeria……………………… 52
3.5 Appraisal
of Nigerian Taxing System……………………. 55
CHAPTER FOUR
MEETING THE CHALLENGES OF
REVENUE GENERATION THROUGH INFORMATION TECHNOLOGY
4.1 Meaning
of Information Communication Technology……. 59
4.2 Relevance of Information Communication
Technology to
Taxation…………………………………..... 60
4.3
Information Technology and Taxation in Nigeria ………. 64
4.4
The Challenges of Information Communication
Technology toward an
improved Taxing System……….. 66
CHAPTER FIVE
CONCLUSION
5.1 Observation…………………………………………………. 70
5.2 Recommendation…………………………………………… 72
5.3 Conclusion…………………………………………………… 75
Bibliography………………………………………………….. 78
TABLE OF CASES
Agberuagba
v. Attorney General O gun State (1985) INWLR (pt3) 395
Anarawos
timber trading company Ltd. NWLR (1969) all NLR 247
Etiosa
Local Government v. Jegede (2007) NWLR (pt. 1045) 537
Exclusive
store Ltd v. Edo Board of internal Revenue (2005) all FWLR (pt249) 1827 C.A.
Knight,
Frank and Ruthley v. A.G
Lagos State
(1998) 7NWLR (pt. 556
Manufacturers
Association of Nigeria
v. A.G Lagos state (2004) All FWLR(pt 249)o1327 H.C
Mahtew
v. Chicory Marketing Board (1938) 60 CLR 263
Mobile producing (Nig.) limited v.
Tai local government council 2 ors (2004)10 NCLR 99
R.
v. Berger (1908) 6CLR 41
S.
A v. Regional Tax Board (1970) ANLR
United
State v. Butler
(1938) 60 CLR 263
TABLE OF
STATUTES
Capital
Gain Tax Act, 1990
Companies
Income Tax Act, 1990
Constitution
of Federal Republic
of Nigeria
Federal
Inland Revenue Service (establishment act no. 13 of 2007)
Income
Tax Management Act, 1961
Personal
Income Tax Act, 1990
Petroleum
Income Tax Act, 1990
Stamp
duty act, 1990
Tax
and levies (Approved List for Collection) Act Cap T2 LFN 2004
Value
Added Tax Act,1993
TABLE OF ABBREVIATIONS
CAC - Corporate Affairs Commissions
CFRN
- Constitution Of The Federal
Republic Of Nigeria
CITA
- Company
Income Tax Act
Citn
- Chartered Institute
Of Nigeria
EBSU
- Ebonyi State
University
FIRS
- Federal Inland Revenue Service
ICT - Information Communication Technology
IT -
Information Technology
LFN
- Laws Of The Federation Of Nigeria
NWLR
- Nigeria
Weekly Law Report
SBIR
- State Board Of Internal Revenue
PC - Personal Computer
PITA
- Personal
Income Tax Act.
ABSTRACT
This
research work titled; Challenges of Revenue Generation in Nigeria: Legal
Perspective is born out of the desire to examine the problem associated with
revenue generation in Nigeria and to proffer solution thereto. Revenue is the
fulcrum of development in any state, for no state can effectively function and
carry out its numerous duties to its citizenry without resources in the form of
revenue. In Nigeria oil revenue seems to be the major source of revenue
basically because others sources are not adequately harnessed effectively. How
can we properly and adequately generate revenue from non oil sources especially
in the area of taxation. What are the obstacle militating against adequate
revenue generation. This and other related issues are discussed in this work.
The method used in this research work, is basically doctrinal the researcher
uses both primary and secondary academic materials. The researcher discovered
administrative inefficiency, lack of adequate funding of the tax agencies,
competition among others as part of the challenges militating against adequate
funding of the revenue generation in Nigeria far-reaching solutions was also
made which includes proper tax education, fight against corruption , use of
I.C.T in tax administration etc.
CHAPTER ONE
GENERAL
INTRODUCTION
1.1 Background of Study
Revenue
generation involves the gathering of resources for the benefit of the society Revenue generation in Nigeria faces
with so many challenges. in which it occurs in a different ways, through crude
oil Revenue and taxation to mention but a few.
Crude
oil plays an important place in revenue generation in Nigeria from the for introduction of the removal of oil subsidy
which generate a lot of controversies later it creates a challenge to Nigeria
economy by boasting our developmental standard positively.
Taxation
plays strategic role in the survival and development of a Nigeria Nation.
This
has been experimented and proven by developed nations around the world as
evident today. Tax system in developing countries, like those in more developed
countries face both new challenges and new possibilities as a result of
technological change. In developing countries, taxpayers and tax administration
must cope with more difficult environments with fewer resources. The role of
new technology in influencing the way a country’s tax system or particular
taxes becomes an issue that needs urgent attention. The realization of this
fact has triggered much interest, planning and restructuring in the area of
developing taxation, especially in the developing economies, including Nigeria. Over
the years, the federal government has been doing so much in revaluing,
restructuring and reforming the Nigeria
tax system with the primary objectives of making it the main source of revenue
generation for the government as obtained in other developed countries. In
achieving this fact, programs and initiative were put in place and executed, one
of such was a study group commissioned in 2002 to among other things understudy
the entire Revenue system identify challenges and coming up with
recommendations on the way forward. According to their report1, it was recommended that the taxing
system be reviewed.
Among the issues discussed
were the drafting of a national tax policy, taxation and federalism, tax
incentives and tax administration. where the taxing system of a country is
weak, its economy tends to be dysfunctional. This is why most nations have
tried to align their tax systems with the growing trend, which is information
communication technology. The world is now a global village and a lot of
innovation has taken place. Nigeria
needs to review some of its obsolete taxing system and embrace the taxing
system of the 21st century.
1.2 Statement of the Problem
Taxation
plays a central part in a country’s Revenue system and in promoting economic
growth. Through taxation, government ensures that resources in the society are
distributed, while giving succour to the weak. The critical challenges before
tax administration in the 21st century Nigeria is to advance the frontier
of professional accountability and awareness of the general public on the imperatives
and benefits of taxation in our personal and business lives with the use of electronic
taxation. Unfortunately, in today Nigeria, the taxation system is
nothing to write home about, the role and effect of taxation is not felt
primarily because of poor administration. The taxing system in Nigeria is still
very crude. The tax collection system is far from being organized even where
compliance is voluntary, in most cases, the taxes collected or paid by the
taxpayer amounts to underpayment due to the activities of corrupt revenue officials.
More so, the bureaucratic bottleneck process involve in getting a tax clearance
certificate is also a major challenge facing this country at this point in
time. Identify critical tax administration challenges in the 21st
century Nigeria and measures required to meet the challenges will not only
guarantee improve revenue base for the country but also position the country
properly to take full advantage offered by the new millennium.
1.3 Objective
of the Study
The
primary objectives of this work is identifying the critical Revenue Generation
challenges facing Nigeria with emphasis on the area of taxation and pinpointing
measures required by tax authorities and practitioners to meet these
challenges. More so, this long essay seeks to examine;
a. Administration
of tax in Nigeria
b. The
use of information communication technology in revenue generation
1.4 Scope of the Study
The
scope of this work will cover the administration and compliance in Nigeria by
analyzing the lapses in the system over the years (1990-date). This research
work shall also cover the impact of information communication technology to Revenue
generation in Nigeria.
1.5 Significance of the Study
There
cannot be a better time to work on critical challenges of revenue generation
than now. Especially with the growing tax consciously and the facts that
information communication technology is a major innovation of the 21st
century. More so, this research will be relevant to legal practitioners. Again,
it will also serve as a reform material for a change in Nigeria Revenue system,
as this work will suggest solution capable of improving the administration of
tax in Nigeria.
Further
more, the project will be useful to interested and independent body of researcher(s) who wish to
conduct research in the similar field or wants to make a reappraisal of this
topic. Also, educationist, academician, processionals and the social community
at large will find this research work a relevant one and a source of reference
for information in revenue generation system anywhere in Nigeria
1.6 Limitation of the Study
In
the course of writing this long essay, I encountered several difficulties
ranging from the inaccessibility and inadequate resources materials, require
for the fulfillment of this work. Furthermore, is the lack of relevant
statistical report and inadequate figure about revenue in the various tiers of
government in Nigeria.
Again, the bureaucratic bottleneck of government parastatals also hinders the accessibility
to requisite information. Above all is the combination of other academic work
with writing this project, couple with the short time required to complete this
research work.
1 Study Group
on the “review of the Nigeria Tax System” inaugurated on august 6, 2002 by the
then Minister of Finance Mallan Adamu Ciroma, www.nigeriatabook.com/index.pbpassessed
on 17th of August. 2011.