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

By

Author

Presented To

Department of Law

ABSTRACT
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 taxation. This actually prompts the analysis of multinational corporate taxation in Nigeria so as to see the effects of corporate investments contribution to foreign investments in Nigeria. Also, the aim of bilateral tax treaty entered into between the Federal Republic of Nigeria and other foreign countries is to encourage economic growth by mitigating international double taxation and other barriers to cross border trade and investment, and to improve tax administration between the contracting nations. The enabling environment created through generous fiscal policies is expected to increase the level of direct foreign investment in Nigeria beyond its present level. On the contrary what obtains are divestments cum capital flight out of the country, it is therefore in line with the above that this study seeks to examine the effects of Nigeria fiscal policies on foreign investment in Nigeria. Therefore, the objective of the study is to examine the extent to which tax incentives have impacted on direct foreign investment in Nigeria; To evaluate the adequacy or otherwise of the present legal regime on corporate taxation and proffer possible necessary reform to the laws; analyze the relationship between taxation and direct foreign investment in Nigeria; to find out who are these multinational corporations that are subject to corporate taxes that can be granted tax reliefs to attract foreign investments into Nigeria. Thus, this study posit that, by identifying the multinational corporations subject to corporate tax, foreign investment opportunities will be created under the Nigerian corporate laws that will attract foreign investments to Nigeria which will boost the revenue development in Nigeria. The old standard of corporation tax, the manual assessment and enforcement procedures cannot meet up with the fast- changing commercial activities of the companies. This consequently creates administrative ineptitude which to a large extent adversely affects revenue generation in Nigeria. There is therefore the need to probe into how the developments have affected our domestic corporate taxation. The study applies the doctrinal methods of research to achieve this and recommends that, Nigeria and United Kingdom and other countries double taxation treaties on multinational corporations be reviewed in line with International best practices by designing sound tax policy, good corporate governance, good tax incentives to encourage investments and amending Nigerian tax laws to guarantee these objectives.