Boundaries to taxes collectible by various tiers of government
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Experts say that the lack of social amenities is one of the major set backs affecting voluntary payment of taxes by tax payers.
No doubt, there is a correlation between voluntary tax compliance and provision of stable and constant electricity, availability of water from the public network for domestic and industrial uses, qualitative educational institutions, security of life and property, functional hospitals, orderly social environment conducive for economic activities and development.
Over time, investors mostly in the private sector have cried out on the state of poor infrastructure across all the levels of government even as they (governments) insist that taxation is a vital fiscal policy for developmental projects.
This makes economy watchers to say that the state of infrastructure and the enabling environment are not encouraging, hence, the apathy expressed by tax payers in Nigeria. Apart from the state of infrastructure, corruption and the stealing of public funds remain most discouraging factors hindering the people’s willingness to pay taxes.
Meanwhile, while States jostle to maximise their internally revenue base, as they sign their budgets for the year 2008, there is the need to notify them that their internally generated revenue, mostly from taxation has boundaries.
Various States have said that reasonable percentage of their budgets will be financed through internally generated revenue, of which taxes and duties are the major source of these revenues.
In an effort to optimise tax revenues, it is worth knowing that every tier of government must operate within stated boundaries in tax collection.
Tax administration
Tax administration in Nigeria is shared among three tiers of government: The Federal Inland Revenue Service (FIRS), State Boards of Internal Revenue (SBIR), and the Local Government Revenue Authority (LGRA).
Despite their locations, all these revenue bodies have different roles they play and also their jurisdiction which by law they are not supposed to exceed.
Take for instance, the Federal Inland Revenue Service which collects taxes and other duties for the Federal Government is charged with the administration of Companies Income Tax (CIT), Petroleum Profit Tax (PPT), Education Tax, Capital Gains Tax (CGT), Value Added Tax (VAT), and Taxes of individuals residing in the Federal Capital Territory and other persons not covered by the State and Local Government taxing powers.
The taxable persons under the Federal Inland Revenue Service
The taxable persons and organisations under the Federal Inland Revenue Service include: the limited liability companies (private/ public); corporations, federal institutions and agencies; non-resident companies/individuals; those in the business of petroleum companies (oil/gas).
Also, FIRS collects taxes from all companies and non-resident individuals liable to capital gains tax.
The taxable persons under the State Boards o f internal revenue
They are employees under the Pay-as-You-Earn (PAYE) scheme; self employed individuals under direct income tax assessment, individual stamping instruments under the stamp duties Act.
Other taxable persons under the State Boards o f Internal Revenue are business units, incorporated bodies and individuals on the account of right of occupancy under the “Land Use Act”, individuals under pools betting, lotteries, gaming and casino tax, business units under the registration of business premises, individuals liable to capital gains tax.
The taxable persons under the local government revenue authority
The taxable persons under this Authority are: Shop owners for rates, liquor operators for liquor licences and fees, individuals and families for marriage, birth and death registration fees, individuals who apply for the street names, property owners and fees on customary right of occupancy, market and lock-up store owner’s fees and levies.
As a way of easing the burden of taxes, experts say that various tax authorities need to create awareness on the enabling tax laws to inform tax payers of the process for filing returns, returns monitoring and appraisal, appeal process, sanctions, and penalties.
No doubt, there is a correlation between voluntary tax compliance and provision of stable and constant electricity, availability of water from the public network for domestic and industrial uses, qualitative educational institutions, security of life and property, functional hospitals, orderly social environment conducive for economic activities and development.
Over time, investors mostly in the private sector have cried out on the state of poor infrastructure across all the levels of government even as they (governments) insist that taxation is a vital fiscal policy for developmental projects.
This makes economy watchers to say that the state of infrastructure and the enabling environment are not encouraging, hence, the apathy expressed by tax payers in Nigeria. Apart from the state of infrastructure, corruption and the stealing of public funds remain most discouraging factors hindering the people’s willingness to pay taxes.
Meanwhile, while States jostle to maximise their internally revenue base, as they sign their budgets for the year 2008, there is the need to notify them that their internally generated revenue, mostly from taxation has boundaries.
Various States have said that reasonable percentage of their budgets will be financed through internally generated revenue, of which taxes and duties are the major source of these revenues.
In an effort to optimise tax revenues, it is worth knowing that every tier of government must operate within stated boundaries in tax collection.
Tax administration
Tax administration in Nigeria is shared among three tiers of government: The Federal Inland Revenue Service (FIRS), State Boards of Internal Revenue (SBIR), and the Local Government Revenue Authority (LGRA).
Despite their locations, all these revenue bodies have different roles they play and also their jurisdiction which by law they are not supposed to exceed.
Take for instance, the Federal Inland Revenue Service which collects taxes and other duties for the Federal Government is charged with the administration of Companies Income Tax (CIT), Petroleum Profit Tax (PPT), Education Tax, Capital Gains Tax (CGT), Value Added Tax (VAT), and Taxes of individuals residing in the Federal Capital Territory and other persons not covered by the State and Local Government taxing powers.
The taxable persons under the Federal Inland Revenue Service
The taxable persons and organisations under the Federal Inland Revenue Service include: the limited liability companies (private/ public); corporations, federal institutions and agencies; non-resident companies/individuals; those in the business of petroleum companies (oil/gas).
Also, FIRS collects taxes from all companies and non-resident individuals liable to capital gains tax.
The taxable persons under the State Boards o f internal revenue
They are employees under the Pay-as-You-Earn (PAYE) scheme; self employed individuals under direct income tax assessment, individual stamping instruments under the stamp duties Act.
Other taxable persons under the State Boards o f Internal Revenue are business units, incorporated bodies and individuals on the account of right of occupancy under the “Land Use Act”, individuals under pools betting, lotteries, gaming and casino tax, business units under the registration of business premises, individuals liable to capital gains tax.
The taxable persons under the local government revenue authority
The taxable persons under this Authority are: Shop owners for rates, liquor operators for liquor licences and fees, individuals and families for marriage, birth and death registration fees, individuals who apply for the street names, property owners and fees on customary right of occupancy, market and lock-up store owner’s fees and levies.
As a way of easing the burden of taxes, experts say that various tax authorities need to create awareness on the enabling tax laws to inform tax payers of the process for filing returns, returns monitoring and appraisal, appeal process, sanctions, and penalties.
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