THE PROBLEMS AND SOLUTIONS TO TAX ADMINISTRATION IN NIGERIA

By

UGWU GERALDINE ONYINYE

Presented To

Department of Accountancy

TABLE OF CONTENT

COVER PAGE I

TITLE PAGE II

APPROVAL PAGE III

DEDICATION IV

ACKNOWLEDGEMENT V

TABLE OF CONTENTS VI

CHAPTER ONE

Introduction 1

CHAPTER TWO

2.1 Literature review 4

2.2 Purposes of tax 6

2.3 Important of tax 7

2.4 Classification of tax 8

2.5 Bodies responsible for tax

administration in Nigeria 11

2.6 Problems of tax administration in Nigeria 18

2.7 Solutions to administration in Nigeria 22

CHAPTER THREE

3.1 Summary 27

3.2 Recommendations 27

3.3 Conclusion 28

BIBLIOGRAPHY 30

CHAPTER ONE

INTRODUCTION:

The statutory functions of all government of Nigeria are summed up in one to ensure adequate provisions to social, political and economic growth and development of the people at the various levels that would afford them good and comfortable living. This role is predominantly the duty of any government and it is essentially this basic fact that calls for governance. The people would wish to have an organized society in which a group of people plays a leading role to harness any available resources for the good of the generality of the people. The business of harnessing resources usually calls forth the contributive efforts of the masses towards ensuring that the government performs its duty most effectively.

To do justice to this topic, one has to appreciate certain ingredients and explanations like knowing what is the meaning of taxation, the objectives of taxation, thereafter the topic will then be expanded by highlighting certain sub-topics like Acts and Decrees guiding tax, administration tax authorities in Nigeria, who should pay tax, who should collect taxes and from whom, the importance of tax, the problem of tax administration in Nigeria and finally the solution to those problems which will help in the improvement towards effective tax administration in Nigeria. There are Acts and Decrees in the laws guiding tax administration in Nigeria. historically, the direct taxation ordinance of 1940 provided for the taxation of Africans and Europeans in the Federal territory and only African's in the various regions. Europeans in the regional Areas were thus exempted from taxation out of all the laws and development in Nigeria taxation, this ordinance is of prime importance.

As a remedy to the unfair implications of the 1940 ordinance, the Raisman fiscal commission of 1957 made a number of recommendations. These include the taxation of both Europeans and Africans throughout the federation. The accepted recommendation of the commissions are contained in section 70 of the Nigeria constitution.

Under the federal government has the exclusive powers to levy tax on the income of all limited liability companies while the federal government and the state government have concurrent powers in respect of personal income tax. These recommendation got emboded in the income tax management Act of 1961, popularly referred to as ITMA 1961, the first taxation Act in the history of Nigeria.

However, this Act has been repealed. The following Act and Decrees currently guide tax administration in Nigeria.