A Critical Appraisal of the Components of Taxation in Nigeria and Proposals for Law Reforms

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INTRODUCTION

Tax has been variously defined over the years. These definitions, when looked at as a whole gives a more comprehensive picture of the phenomenon as opposed to a single definition. According to the Oxford English Dictionary the word ‘tax ' refers to a compulsory contribution to the support of government levied on persons, property, income, commodities, transactions, etc, now at a fixed rate mostly proportionate to the amount on which the contribution is levied. While this serves in crude terms to tell us what a tax is, it is however deficient in the sense that it does not reveal the purpose of taxation. We however find more scholarly definitions in decided cases. For instance, in MATTHEWS v. CHICORY MARKETING BOARD it was
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Various tax statutes all contain charging clauses. Under the PITA, this is found in S 1 which provides thus:

"There is hereby imposed a tax on the income of individuals, communities and families, and arising to any trustee or executor under any settlement, trust or estate…"

In respect of the CITA, S 8 provides the charging clause thus:

"Subject to the provisions of this Act, the tax shall, for each year of assessment , be payable at the rate specified in subsection (1) of section 29 of this Act upon the profits of any company accruing in, derived from, or brought into, or received in Nigeria…"

In the case of the VAT ACT, the charging clause is contained in S 1(1) where it is provided that:

There is hereby imposed and charged a tax to be known as the Value Added Tax… which shall be administered according to the provisions of this Act."

The effect of these provisions is to make a taxpayer liable to taxation. In reality, tax is a creation of statute and there is no of common law or equity that makes a man liable to tax. Therefore, from time to time whenever a dispute arises between the relevant tax authority and the taxpayer, there is a need to establish a judicial construction of any particular provision of a tax statute. In construing the words of a statute, the onus is on the tax authority to prove the intention of the legislature from the wordings of the statute. Where the
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