1. AN OVERVIEW OF STATUTES ON
TAX ADMINISTRATION IN
NIGERIA
A paper presented by Aladesawe A.U, Esq, of Joint Tax Board at a workshop organized
by the Chartered Institute of Local Government And Public Administration of Nigeria,
held on 20th June, 2013 at the Merit House, Abuja

2. Introduction
• Tax Administration is the implementation of tax laws by the various
tax authorities in order to achieve their primary aim of generating
revenue for government. The aim of taxation will be defeated if
there are only good taxes which are badly administered.
• Thus, due to the complexity of tax laws and the large population of
taxpayers to be administered tax authorities and key stakeholders
must come to consensus in the interpretation of tax laws.
• Administration of tax is the function of the three tiers of
Government. The Federal Inland Revenue is charged with
administering taxes at the Federal level. While the various States’
Board of Internal Revenue administer taxes at the States, while the
Local Government Revenue Committee administer taxes at the
Local Government Areas.
• Joint tax Board (JTB) interfaces between the three organs.

3. • It is pertinent to note that one major difference between taxes and
fees/charges is that, taxes are imposed by government subject to
the various tax statutes. I.e. VAT Act. See Coltness Iron Company v
Black (1881) 6 App, Ca. 315) where the Court held that “No tax can
be imposed on the subject without words in Act of Parliament
clearly showing an intention to lay a burden on him…”.
• In Cape Brandy Syndicate v IRC (1921) K.B, 64, wherein Rowlat J.
stated that in a taxing Act one has to look merely at what is clearly
said. There is no room for intendment. There is no equity about a
tax.
• In other words, a tax administrator cannot use his discretion in
imposing taxes, as taxes must be charged and imposed on taxpayer
by statute. Taxpayers must understand the basis of the taxes
imposed on them pursuant to the various tax laws.

4. TAX STATUTES GOVERNING TAX
ADMINISTRATION
• "FIRSA" - Federal Inland Revenue Service (Establishment)
Act, 2007 [Cap F36, 2004, LFN as updated 2007]
• "CITA" - Companies Income Tax Act [Cap C21, 2004, LFN]
• “CEMA” - Customs and Excise Management Act
• "PITA" - Personal Income Tax Act [Cap P8, 2004, LFN] as
amended
• "VATA" - Value Added Tax Act, [ Cap VI, 2004, LFN ]
• "CGTA" - Capital Gains Tax Act [Cap C1, 2004, LFN]
• "SDA“ - Stamp Duties Act [Cap S8, 2004, LFN]
• "PPTA" - Petroleum Profit Tax Act [Cap P13, 2004, LFN]
• "ETA" - Education Tax Act [Cap E4, 2004, LFN] now
Tertiary Education Trust Fund (Establishment
Etc.) Act
• "NITDAA" - National Information, Technology Development
Agency Act, 2007

5. • Company’s Income Tax (CIT) - One of the major taxes administered
and collected by the FIRS charged on 30% of the profits of Companies
pursuant to the Company Income Tax Act.
• Personal Income Tax (PIT) was introduced in 1993 by virtue of the
Personal Income Tax Decree No. 104 (now Act). It is charged on
residents of states and those assessed to PIT by FIRS namely: persons
employed in the Armed forces, Nigeria police Force, diplomats,
resident of the FCT, and persons resident outside Nigeria who derive
income or profit in Nigeria.
• Under the PIT, there is the PAYE Scheme for those in employment and
Self Assessment for those taxpayers that are self-employed
• Section 86 of PITA created the Joint Tax Board (JTB), a body that
interfaces between the three tax organs and advises government on
issues personal income tax.

6. • Education Tax (EDT) was introduced in 1993 by virtue of the Education
Tax Decree No. 7 (now Act). In 2011, pursuant to the Tertiary Education
trust Fund (Establishment Etc.) Act, 2011, the EDT Act was abolished.
It is charged on 2% of companies’ assessable profit. Section 2 of the
Act vests the assessment and collection on FIRS.
• Federal Inland Revenue (Establishment) Act, 2007 lists out the various
tax laws to be administered by the FIRS in Schedule 1 of the Act. These
are companies income tax Act, Personal Income tax Act, Petroleum
profit Tax Act, Capital Gains Tax Act, VAT Act, Stamp Duty Act, Taxes
and Levies (Approved List for Collection) Act. The Act grants FIRS wide
tax administrative powers. I.e. call for returns, books and information.
Sections 26- 30 of the Act.
• Capital Gains Tax (CGT) is charged pursuant to Capital Gains Tax Act at
the rate of 10% where there is a disposal of assets by a person. The
Constitution vests its administration on both the Federal and State
Governments since the National Assembly and the various States’
Houses of Assembly can legislate on it.

7. • Petroleum Profit Tax (PPT) charged on 85% profit of companies
engaged in petroleum operations in Nigeria. There is a Petroleum
Industry Bill (PIB) seeking to abolish the PPTA already at an advanced
stage of its passage in the National Assembly. It is administered and
collected by FIRS.
• Value Added Tax (VAT) is charged on the sale of specified goods and
services at the rate of 5% pursuant to the VAT Act. VAT collection goes
in the VAT Pool Account unlike the CIT collection that goes into the
Federation Account. It is shared as follows: Federal Government -15%,
State Government -50%, Local Government-35%. Federal Inland
Revenue Service administers and collects VAT pursuant to the 1st
Schedule of the FIRS Act, 2007.
• The Nigeria Custom Service is a collecting agent for FIRS at the various
ports of entries.

8. • Withholding Tax (WHT) is an advance payment of income. It is
deductible at the rate of 10% at the point of payment or when credit is
taken, which ever comes first, for the specified activities. The most
common type of WHT is dividend and contract fees.
• WHT does not have a separate Act, its provisions are found in different
tax legislations i.e. PIT Act, CIT Act and VAT Act.
• Stamp Duties (SDA) – charged pursuant to the Stamp Duties Act, 1939
(as amended). Stamp duties due from individuals are paid to the State
while corporate bodies pay to the Federal Government . It is listed as
Item 58 in the Exclusive Legislative List of the 1999 Constitution,
thereby making it a federal tax.
• Stamp Duties rates are in two forms namely: Flat Rate Charges (which
does not vary with consideration on the value of document stamped)
and the ad valorem charges (varies with the amount of consideration).

9. • Customs & Excise Taxes- These are types of taxes charged at the
Nigeria’s Ports of Entry on certain imported and exported goods. It is
administered and collected by the Nigeria Customs Service Board by
virtue of the Customs and Excise Management Act. It is in Item 16 of
the Exclusive Legislative List of the 1999 Constitution making it
exclusive purview of the Federal.
• Export Duties & Import Duties- Duties Collected by NCS at the points
of entries by virtue of Custom and Excise Act.
• National Information Technology Development Agency Levy (NITDA
Levy) which the FIRS has been mandated to collect on behalf of the
National Information Technology Development Agency (NITDA). It is
backed up by the NITDA Act No. 27 of 2007 and is imposed at the rate
of 1% of profit before tax as disclosed in the financial statement of
companies with the annual turnover of N100 Million engaged in
Banking, insurance, pension fund administration, GSM services, and
internet services.

10. Conclusion
• A lot of our tax laws are archaic and in need of dire amendments.
Some of the provision are no longer consistent with the economic
realities of today. Hence, the National Tax Policy enjoins the
periodic review of our tax laws and that the Nigerian tax system
must be Certain (its laws and administration must be consistent)
and clear.
• Thank you for listening