Tax Administration and Government Revenue Performance in Nigeria: A Book of Readings

  • Book Details
  • Summary

Volume: | Pages: 260 | Year Published: 2013

Publisher: National Institute for Legislative Studies

Author: Prof. Mike Obadan | Dr. Kanayo Ogujiuba | Elijah Udoh | Mutiu Oyinlola | Oluwatosin Adeniyi | Dr. Asimiyu Abiola | Harrison Okafor | Uzochukwu Amakon | Dickson Oriakhi | Badayi Sani | Edet Akpanpkan |

Subject Matter
Nigeria Tax Law and Policy

This book is targeted at various stakeholders especially in academics (Students, Lecturers and researchers), and policy formulation. The book seeks to serve as an evaluating instrument for those involved in the administration of tax policy. Firstly, it will help tax administrators and policy makers to set baselines for assessing tax revenue performance and determine alternative options for addressing the issues in tax policy administration in Nigeria. Secondly, it coverage pertinent areas aimed at educating tax law and policy students, inform tax researchers, and administrators of public finance and tax policy. Finally, it hopes to stimulate debate on tax law and policy administration in Nigeria with a view at improving revenue generation and tax administration in Nigeria. To address these objectives the paper is divided into eleven chapters, with contributions from several authors with specialisation in specific areas of tax administration, policy and law in Nigeria

Gaps Identified
The books was essentially written by economists with no input from tax administrators or tax lawyers who will better capture the strengths, weaknesses and constitutionality of tax laws in Nigeria. For instance, VAT has been argued to be unconstitutional, however its constitutionality is barely addressed. Tax law experts and administrators would have also provided specific statutory amendments that would help improve tax policy and laws in Nigeria as against the general recommendations suggested in the book. The book also fail to properly address the need for an articulated ideology and purpose behind tax policies other than increasing revenue drive for government. Tax policy should generally be specific ideology and purpose including wealth distribution, economic development, resource control, or social welfare. None of the papers examined this aspect of tax policy or recommend policy direction best suited for current day Nigeria

It is recommended that a second edition of this book should invite inputs from tax law experts, administrators and the private sector, for a more rounded and realistic recommendations at improving the Nigerian tax regime. The paper should also address the need to develop tax policy direction beyond mere revenue generation. This will help make the use of generated revenue more sustainable as it will be well planned, focus and with realizable targets

Reviewer: Dr. Bethel Uzoma Ihugba

Rank: Research Fellow

Department: Legal Research Division

Date Of Commencement: July 17, 2018

Date Of Completion: June 26, 2018

Chapter one
Chapter one, written by Prof. Mike Obadan, discusses the evolution of the role of government in national economy, the financing of government expenditures and the significance of tax policy in national economic development. It posits that government has an indispensable role to play in the modern market economy particularly in bringing about macroeconomic stability, critical infrastructure necessary for effective private sector investment, and human development through effective economic policies. This, chapter suggests is the rationale for the focus of the book on government revenue performance and tax administration in Nigeria

Chapter two
In Chapter two written by Dr. Kanayo Ogujiuba, a summary of theory of tax structure and development is examined on the backdrop of international comparative analysis. Ogujiuba identifies the structural pattern of the economy vis-a-vis the fiscal profile and system of the Nigerian economy, the dominance of the informal agricultural sector, poor tax administration, and weak institution as critical issues affecting tax revenue development in Nigeria. He proposes regular tax reforms to take advantage of opening economic opportunities and potentials for diversification in the Nigerian economy

Chapter three
In Chapter three, Elijah Udoh, examines the concept of tax elasticity and buoyancy in Nigeria. The author argues that tax in addition to serving as a tool for redistribution of income and wealth by controlling individual consumption patterns also helps maintain equilibrium in the balance of external trade and payments, and provision of revenue for funding government services. Udoh argues that the amount of resources mobilised through tax is dependent on: rate of tax, tax base and the efficiency in tax collection and administration. He contends that tax revenue can only improve policies that positively increase the national income by also expanding the tax base. A key to achieving this, he contends is by improving the quality of investment opportunities and environment in Nigeria.

Chapter Four
Mutiu Oyinlola, in Chapter 4, as a follow up to chapter three advocates for tax policy reform. The author argues that this should be based on the necessity to to grow the nation's internally generated revenue, provide sufficient information to tax payers on tax compliance, reduce multiple taxation, improve accountability, improve man-power, repeal obsolete tax laws and provide a consistent policy direction for tax matters in Nigeria

Chapter Five
Oluwatosin Adeniyi, in Chapter 5, discusses the challenges to tax administration in Nigeria. He opines that tax administration should be designed to guarantee the functioning of tax policy towards the core objectives of an effective tax system which is primarily generating maximum revenue. In his opinion, Federal tax administration as piloted by the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS) is facing major challenges of tax of weak institution, corruption, poor information gathering, deficient tax payers' register and large informal sector activities. He advocates for regular tax reform to continue to resolve these challenges as they arise

Chapter Six
Kanayo Ogujiuba, Asimiyu Abiola and Harrison Okafor in Chapter 6, examine recent tax legislations in Nigeria. The authors gave overview of tax legislations, particularly recent amendments to PITA, CITA and VAT. The conclude that the amendments have improved revenue generation capacity, however there is need to properly classify taxes, strengthen tax regulatory agencies and adopt technological innovation to tax collection and administration to improve efficiency and reduce tax default and evasion

Chapter Seven
In Chapter 7, Asimiyu Abiola examines sources of revenue for financing government activities. He questions policies measures to reverse revenue under-performance and huge deficit financing which have not been very successful. The chapter identifies the three main sources of revenue as oil, non-oil and other sources and gives account of the performance of the various components of the different sources of revenue. The chapter recommends strong tax reform initiatives that could provide incentives to generate non-oil revenue. He concludes by recommending a continued widening of the tax base and effective tax assessment

Chapter Eight
In Chapter 8, Uzochukwu Amakon, assesses performance of federally collected revenue and observes that revenue should help stimulate sectorial economic growth. He noted that this is yet to be felt in other sectors except the oil sector. But the federally collected revenue has been volatile due to its dependence on oil. He recommends effective economic diversification of revenue base outside oil revenue. He also recommends devolution of power in line with federal system and the constitutional provisions of revenue sharing in order to improve revenue performance in Nigeria. He argues that this would encourage different tiers of government, particularly States and Local Governments, to improve their internally generated revenue formula

Chapter Nine
Dickson Oriakhi in Chapter 9, in apparent follow up to chapter 8 evaluates the performance of revenue generated by state governments in Nigeria. He observes that state governments' internally generated revenue is weak and poor. He noted that most States of the Federation rely on Federal allocation to carry out their fiscal operations. He calls for a review of the current revenue sharing formula and particularly for states to be empowered and encouraged to increase their internally revenue generation capacity

Chapter Ten
Going down the tier of governments, Badayi Sani, in Chapter 10, explores revenue performance of local governments (LGs), the impediments to a viable revenue drive, and implications of over-dependence on allocation. The author observes that local government is the closest to the people and thus has the best opportunity to bring development to the grassroots. The author notes however that the revenue performance of local governments has been weak and hence affects its effective provision of services. He notes that dependence on statutory allocation, low commitment, ineffective supervision, inadequate record and poor accountability and constitutional limit to tax collectable by local governments are the critical challenges affecting the local government's sustainable revenue generation. He recommends an increase in scope of taxes collectible by local governments and diversification of its revenue base as solutions to poor revenue generation and dependency

Chapter Eleven
In chapter eleven, Edet Akpanpkan summarises the observations and recommendations in preceding chapters. He observed that: all tiers depend on statutory allocation from oil revenue, government revenue fluctuates as the oil prices fluctuate, attempts at diversification have been ineffective, internally generated revenue of states are insignificant and unexplored, the tax regime is ineffective and there is no patriotism in governance. Flowing from these observation, he highlighted the following recommendations: diversification of the economy, effective tax reform, improved accountability in budget implementation, improve auditing exercises and public advocacy on tax and its benefits