Evidence from a natural experiment in colonial nigeria daniel berger september 7, 2009 abstract can local colonial institutions continue to a ect peoples lives nearly 50 years after decolo. Constitution of the federal republic of nigeria 1999. Equally, property taxes could be beefed up substantially. These levies were paid by market men and women, farmers, etc. Taxation in nigeria different types, forms and classes of taxes exist anyaduba, 2004 but the commonest classification in nigeria is that according to the tax payer categorised as direct or indirect. Property taxation in nigeria interrogating the policy and law towards sustainable reform, prof. Tax identification number tin in nigeria, every citizen of nigeria working with the government, the private sector or owns. Franzsen working paper lincoln institute of land policy. Dye and england assessing the theory and practice of land value taxation 3 executive summary t he land value tax is a variant of the property tax that imposes a higher tax rate on land than on improvements, or taxes only the land value. Chelliah 1989 observed that an increase in indirect taxation compared to direct taxation reduces economic growth more than direct taxation does.
The primary objective of this paper is to prepare a. A taxpayer may be liable to nigerian taxation, either because he is resident in nigeria or because the source of his income is located in. Lord laggard passed many laws in northern nigeria to enable him collect the taxes. Each member of the county property appraisal staff shall. But where a person provides services to another for e. Taxation papers are written by the staff of the european commission s directorategeneral for taxation and customs union, or by experts working in association with them. Where the income earner is a corporation, the corporate tax rate in nigeria is thirty per cent 30% of the annual profit of the corporation. The legal framework and system of taxation in nigeria. Taxation, as a means of generating revenue internally has helped boost the socio economic of the nigerian state, as well as the political stability of the nation, even at this moment of economic crisis, due to the fall in crude oil price. Government use tax proceeds to render their traditional function of law and order, defense against external and internal aggression regulation of trade and business to ensure. Evidence from a natural experiment in colonial nigeria daniel berger september 7, 2009. Income derived by a resident of a contracting state from immovable property including income from agriculture or forestry situated in the other contracting state may be taxed in that other state. Property tax is generally a tax imposed by municipalities upon owners of real property within their jurisdiction based on the value of such property.
Tax policy, tax legislation and tax administration. Both papers show that institutions which respected property. Apr 20, 2017 nigeria has a new national tax policy the federal executive council, the highest executive decision making organ in nigeria just approved a new national tax policy for the country. Where a person rents or hires propertyservices from another, wht at the rate of 10% will apply.
Ta x i n g t h e u r b a n b o o m recommended literature ali, m. Property tax takes different forms in many countries around the world but generally at affordable. Introduction taxation is machinery or process in which society and communities or group of individuals are contributing into an agreed sum which is important for the resolution, development and administration of the public ogundele, 1999. Property taxes actionaid international briefing progressive taxation briefing what are property taxes. Constitution of the federal republic of nigeria 1999 arrangement of sections chapter i general provisions part i federal republic of nigeria 1. Pdf an assessment of property tax administration in edo state. Abiola sanni observed that in a federal system, allocation of taxing powers. Avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains the government of the federal republic of nigeria government of the united kingdom of great britain and northern ireland. The nigerian tax system has undergone several reforms geared at enhancing tax collection and administration with minimal enforcement cost. Any form of property created by the person disposing of it. The petroleum profit tax is subject to any resident company or person in charge of a nonresident company who are exploring for petroleum or producing it in nigeria. In addition to paying companies income tax, incorporated corporations in nigeria, engaged in any commercial activity, including real estate or real property transactions from which they make a profit, are liable to pay two per cent 2% of such profit as education tax to the education trust fund.
Content analysis of published works, policy documents, and archival materials on the subject. Traditional rulers like kings and queens were the ones who collected some sort of levies ishakorle back in those days. Before 1930 there was nothing like a formal tax system or taxation in nigeria. Property tax in africa lincoln institute of land policy. This includes rental income on both real and personal property.
Employees simply pay their income tax through the pay as you earn paye system, whereby employers deduct the due tax at source from the salaries and transfer it directly to the firs on a monthly basis, while independent workers and beneficiaries of additional income are required to file their own tax returns. Effects of property tax on sustainable housing delivery in. The objective of this study is to investigate the impact of taxation on economic development of nigeria proxy by the gross domestic product gdp. Activities of nonnigerian companies, which would attract tax in nigeria and other special issues, are spelt out in the laws. Few, ifany have examined this line of research in nigeria. The land use act and equity factor in property taxation in nigeria.
From these laws, three expressions of partnerships are recognized. Introduction following this brief introduction, part ii of this paper sets out briefly the rationale for taxing land and property, both as a source of local government revenue and in terms of its effects on efficient land use. First of all, the 5% tax is on the value of the property rather than on any. An assessment of property tax administration in edo state.
Property tax is an untapped goldmine in nigeria the. Under current nigerian law, taxation is enforced by the 3 tiers of government, i. Chapter iii taxation of income article 6 income from immovable property 1. One major source of generating this revenue is taxation. In nigeria, nobody can dispute the fact that though this taxes are been collected, they are. The nigeria tax system, like any tax system, is a tripartite structure which comprises of. Taxes on land and property have both fiscal and nonfiscal effects. Taxation papers are intended to increase awareness of the work being done by the staff and to seek comments and suggestions for further analyses. Taxes in nigeria are all collected by the national federal inland revenue service firs. Tax policy forms the basis for tax laws while tax administration is the implementation of the tax laws. In nigeria, property taxation has limited revenue potential firstly because the nation places. As a general rule, income on a property rent, hire or lease payments or rights royalties situated in nigeria is liable to tax in nigeria, the place of payment not withstanding. Pdf an assessment of the prospects of property tax. Qualifications, duties, and compensation of appraisers b duties.
An assessment of property tax administration in edo state, nigeria. An assessment of the prospects of property tax administration in. Taxation in nigeria and history of taxation in nigeria a tax in nigeria is a compulsory levy imposed by the federal government of nigeria on individuals and corporate entities in respective of return of service expected from the government. Gregory mankiw is professor of economics, matthew weinzierl is assistant professor of business administration, and danny yagan is a ph. Best accounting software for small business owners in nigeria. The direct tax is a levy on personal, corporate income or property. These are market input variables and institutional input variables, the first category being determined by the forces of demand and. Where a person rents or hires property services from another, wht at the rate of 10% will apply. Optimal taxation in theory and practice 060109 final. Taxation of partners and partnerships in nigeria ololade olukowi 2 lagos, though, has since outgrown the western region. Assessing the theory and practice of land value taxation.
This form of tax is reported to be one of the most stable sources of revenue to governments however. Pdf introduction taxes are known to be levies paid by citizens of a community. The relationship between indirect taxation and economic growth has been examined severally by different researchers. In compiling this publication, member firms of the pkf network have based their summaries on. Nigerians under the law are to pay 25% of their total worldwide income while foreign individuals are to pay 25% of the profit made in nigeria only. An assessment of the prospects of property tax administration in nigeria. Part ii powers of the federal republic of nigeria 4. Ts17 property taxation volkan cagdas, mehmet gur and vildan kurt ts17. The pkf worldwide tax guide 20 wwtg is an annual publication that provides an overview of the taxation and business regulation regimes of the worlds most significant trading countries. This publication is a summary of the major tax laws in nigeria, prepared for general purpose. Property taxes ctober 21 3 in zambia, there is a property transfer tax ptt which covers sales of all types of property.
The recent reforms include the introduction of tin. Aug 09, 2016 taxation in nigeria and history of taxation in nigeria a tax in nigeria is a compulsory levy imposed by the federal government of nigeria on individuals and corporate entities in respective of return of service expected from the government. More importantly as is the case for any other tax, the proposed. They are usually based on the market value, the size or the location of land andor buildings and can apply to either residential whether owned by an individual or a company or commercial property. Taxation in nigeria understanding nigerian tax system. More importantly as is the case for any other tax, the proposed property tax should be a social contract with specific benefits to taxpayers in the fct rather than merely to generate revenue for government. Double taxation agreement between china and nigeria. Introduction globally, taxation is the nucleus and the path to development because it is one of the formidable options to generate revenue by government. Taxation in nigeria plus history of taxation in nigeria.
Double taxation relief between the federal republic of. In nigeria, property taxation has limited revenue potential firstly because the. Government to source for a new means of generating additional revenue internally through property tax. Gregory mankiw, matthew weinzierl, and danny yagan n. Government imposes levies on individuals, companies, organisations in the form of tax so government machinery.
Desiring to conclude an agreement or the avoidance of double taxation and the. Taxes on land and property have both fiscal and nonfiscal. The policy will now be endorsed by the national economic council to recognize the federal system of government given the application of the policy to all tiers of. Under companies income tax act you have to pay companies income tax if you are a resident or nonresident company incorporated in nigeria. Examples are turnkey projects, allocation of income and expenditure between the foreign company and its branch in nigeria, transfer pricing etc. The city of lagos in nigeria has attracted attention for its tax and. The land use charge law 2001 was therefore a creation of the lagos state government to give legal backing to revenue generation through property taxation in order to provide sustainable housing delivery.
Capital gains tax ctober 21 4 actionaid is a global movement of people working together to achieve greater human rights for all and defeat poverty. Pdf an assessment of the prospects of property tax administration. Property tax appears to emerge as a potential cornerstone for the efforts to strengthen broad. Pdf the mode of administration of property tax determines its buoyancy.
Liability of property for taxation shall not be affected by the individual or corporate character of the property owner or by the resident or nonresident status of the property owner. Many other types of changes in property tax policy, such as assessment freezes or limita. A taxpayer may be liable to nigerian taxation, either because he is resident in. He is a member of the advisory board of the international property tax institute, executive director of the southern african tax institute, a senior fellow in the taxation law and policy research institute, monash university, australia. According to azubike 2009 tax is a major source of government revenue all over the world, including nigeria.
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