What is the role of taxation?
What is the role of taxation?
Most importantly, taxation is a major source of government revenue and tax proceeds are used by the government to render their traditional functions such as: provision of good roads, maintenance of law and order, defense against external aggression, regulation of trade and business to ensure social and economic …
What is taxation in Nigeria?
Tax administration in Nigeria is vested in the three tiers of government. These include companies’ income tax, personal income tax, capital gains tax, value-added tax, education tax, technology tax, stamp duties, and withholding tax. Penalties are imposed for failure to pay taxes when due.
What is the greatest purpose of taxation?
Taxation, imposition of compulsory levies on individuals or entities by governments. Taxes are levied in almost every country of the world, primarily to raise revenue for government expenditures, although they serve other purposes as well.
What is the importance of taxation in our country?
Governments impose charges on their citizens and businesses as a means of raising revenue, which is then used to meet their budgetary demands. This includes financing government and public projects as well as making the business environment in the country conducive for economic growth.
What are the main principles of taxation?
These are: (1) the belief that taxes should be based on the individual’s ability to pay, known as the ability-to-pay principle, and (2) the benefit principle, the idea that there should be some equivalence between what the individual pays and the benefits he subsequently receives from governmental activities.
How can we avoid taxation in Nigeria?
How to avoid paying excessive taxes in Nigeria
- Donate Money to Organizations listed in schedule 5 of CITA.
- When you sell an asset, reinvest it into the same class of asset.
- Deduct Vat that you pay on your purchases from vat that you receive on your supplies.
- Register an NGO (Non Governmental Organisation) or a Trust.
What are the 5 principles of taxation?
What are Taxation Principles?
- Broad application.
- Broad tax usage.
- Ease of compliance.
- Expenditure matching.
- Fairness in application.
- Limited exemptions.
- Low collection cost.
What are the types of taxation?
Taxes on What You Earn
- Individual Income Taxes.
- Corporate Income Taxes.
- Payroll Taxes.
- Capital Gains Taxes.
- Sales Taxes.
- Gross Receipts Taxes.
- Value-Added Taxes.
- Excise Taxes.
What are the 3 principles of taxation?
The principles of good taxation were formulated many years ago. In The Wealth of Nations (1776), Adam Smith argued that taxation should follow the four principles of fairness, certainty, convenience and efficiency.
What are 3 types of taxes?
Tax systems in the U.S. fall into three main categories: Regressive, proportional, and progressive. Two of these systems impact high- and low-income earners differently. Regressive taxes have a greater impact on lower-income individuals than the wealthy.
What are the two main principles of taxation?
What are the basic principle of taxation?
What is the purpose of the tax system in Nigeria?
Like other countries, the main function of the Nigerian tax system is to generate revenue for the running of the government at all levels and provide infrastructure to the public. Effective tax drive is achieved through an efficient tax administration and tax system reforms.
How does an employee pay tax in Nigeria?
Personal Income Tax (Amendment) Act, 2011 (“PITAM”) is the principal act for the taxation of employees in Nigeria. Employees pay tax based on residency. Thus, an employee would be tax resident if the employer has a fixed base in Nigeria. the employee has paid tax in another country.
Who are the three tax authorities in Nigeria?
The administration of tax is vested in various tax authorities depending on the type of tax under consideration. In Nigeria, there are three (3) authorities namely; (a) Federal Board of Inland Revenue.
Can a non resident person pay tax in Nigeria?
In the case of employment, a non-resident person is liable to tax in Nigeria if the duties of employment are wholly or partly performed in Nigeria, unless: the remuneration of the employee is liable to tax in that other country under the provisions of the avoidance of double taxation treaty (DTT) with that other country.
What are the types of taxes in Nigeria?
- Companies Income Taxes (CIT)
- Value Added Taxes (VAT)
- Withholding Taxes (WHT)
- Petroleum Profits Taxes (PPT)
- Personal Income Taxes (PIT)
- Stamp Duties (SD)
- Capital Gains Taxes (CGT)
- National Information Technology Development Levy (NITDL)
- Tertiary Education Taxes (EDT)
What is the income tax rate in Nigeria?
The Personal Income Tax Rate in Nigeria stands at 24 percent. Personal Income Tax Rate in Nigeria averaged 24.00 percent from 2011 until 2016, reaching an all time high of 24.00 percent in 2012 and a record low of 24.00 percent in 2012. Nov 24 2019
What is the withholding tax in Nigeria?
There is a withholding tax (WHT) of 10% which is applicable to dividend payments in Nigeria. The tax is deducted by the investee company before remittance of dividends to shareholders.
What has been the history of taxation in Nigeria?
The present form of Nigeria taxation can be traced back to 1914. During that year, the Northern and Southern Directorate implemented the basics of taxation in Nigeria. In addition, it helped to start the sequence of tax ordinances in Nigeria.