Tax Policy in Nigeria Essay
A tax policies represent key resource allocator between the public and private sectors in a country. It is usually imposed on individuals and entity that make up a country. The funds provided by tax are used by the states to support certain state obligations such as education systems, health care systems, pensions for the elderly, unemployment benefits, and public transportation. A nation’s tax system is often a reflection of its communal values or the values of those in power. To create a system of taxation, a nation must make choices regarding the distribution of the tax burden-who will pay taxes and how much they will pay-and how the taxes collected will be spent.
In Nigeria, the taxation system dates back to 1904 …show more content…
• Review all aspects of the Nigerian Tax System and recommend improvements therein.
• Review the entire tax administration and recommend improvements in the structure for the whole country.
• Consider measures to bring international developments in tax administration to bear in Nigeria.
In 2004, a Working Group (the WG) was inaugurated to review the report and recommendations of the SG. – The WG agreed with the SG’s recommendations for a National Tax Policy and recommended the creation of an autonomous National Customs & Revenue Authority to assimilate all tax administration powers and duties with funding from retained tax revenues. The WG also reviewed each SG proposed modification to existing tax laws and provided comments thereon. They include, strengthening of Tax Administration, proposed prioritized strategies for implementing the proposed reform and passage of new tax Bills. Subsequent to the report of the WG in 2004, the government has presented the following tax legislation to the National Assembly:
• The Federal Inland Revenue Service Act to establish the agency as an autonomous body and guarantee its funding from a percentage of retained tax collections.
• Amendments to the Personal Income Tax Act, Companies Income Tax Act and the VAT Act.
• For the most part, the amendment Bills reflect the recommendations of the SG and WG.7
It is expected that the new tax legislation will be passed into law by 2006, however, today,