Principles of Taxation in Nigeria

14253 WordsFeb 11, 201358 Pages
RGeneral Principles of Taxation Fundamental Principles in Taxation Taxation  Taxation is the inherent power of the sovereign, exercised through the legislature, to impose burdens upon subjects and objects within its jurisdiction for the purpose of raising revenues to carry out the legitimate objects of government.  It is also defined as the act of levying a tax, i.e. the process or means by which the sovereign, through its law-making body, raises income to defray the necessary expenses of government. It is a method of apportioning the cost of government among those who, in some measure, are privileged to enjoy its benefits and must therefore bear its burdens. Taxes …show more content…
The oil industry is greatly imbued with public interest as it vitally affects the general welfare. Sumptuary purpose of taxation  More popularly known as the non-revenue or regulatory purpose of taxation. While the primary purpose of taxation is to raise revenue for the support of the government, taxation is often employed as a devise for regulation by means of which certain effects or conditions envisioned by the government may be achieved.  For example, government may provide tax incentives to protect and promote new and pioneer industries. The imposition of special duties, like dumping duty, marking duty, retaliatory duty, and countervailing duty, promote the non-revenue or sumptuary purpose of taxation. Theory and basis of taxation  The power of taxation proceeds upon the theory that the existence of government is a necessity; that it cannot continue without means to pay its expenses; and that for these means, it has a right to compel all its citizens and property within its limits to contribute.  The basis of taxation is found in the reciprocal duties of protection and support between the State and its inhabitants. In return for his contribution, the taxpayer received benefits and protection from the government. This is the so-called “benefits received principle.” Life blood or necessity theory  The life blood theory constitutes
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