What is Tax?
Tax can be defined as a compulsory levy by government on goods, services, income and wealth. Primarily to obtain r evenue. In other word, it is levy or dues on the income of persons and companies. It provides definite source of revenue of person for government expenditure. It is the way by which government obtain extra money it spends from income of individual or companies
Tax in Nigeria
Tax was collected in Nigeria long before the coming of Europeans. It was collected by the Local Chiefs for the purpose of administration and defense. Every person was expected to give part of his or her proceeds from cultivation of land to the state. Those who were cultivations were required to give their sources for public work such as clearing the bush, digging the pit latrines, wells etc for the benefit of the community as a whole. Failure to render such services usually resulted in loss of properties, which might be reclaimed after payment of line.
After independence state government were to find out other sources of generation revenue. The first tax was introduced in 1904 in the northern region by Lord Types of Taxes
1. Direct Tax
2. Indirect Tax
Direct taxes in Nigeria consist of the following:
1. Personal Income Tax (PIT)
1. Company Income Tax (CIT)
2. Withholding Tax (WHT)
3. Capital Gain Tax (CGT)
4. Capital Transfer Tax (CTT)
5. Petroleum Profit Tax (PPT
Indirect taxes in Nigeria consist of the following:
1. Custom Duties
2. Excise Duties
3. Value Added Tax (VAT)
The challenges Encountered in Tax Collection
According to Lawal (1982) posits that the following are the problems of tax collection in Nigeria. 1. Inadequate Staff
Lack of adequate staff or manpower to carryout the...