Revenue implications of nigerias tax system in nigeria. Budget office of the federation federal republic of nigeria. Government revenues are part of government budget balance calculation. Naming of street registration fee, excluding any street in the state. A budget is the sum of money allocated for a particular purpose and the summary of intended expenditures along with proposals for how to meet them. Deloitte guide to fiscal information 201112 by sven. Scarlett 2011 established empirically that an increase in the share of taxes from personal taxable income has the greatest harm on per capital gdp over time and correction to equilibrium from such an impact would take up to nine years. In many rich countries, tax constitutes 3040 percent of the gdp golit. The government has reined in the excessive fiscal expansion of 2010.
Each department is subdivided into divisions for functional purposes. Office of the secretary to the government of the federation sgf. In nigeria the budget is normally presented by the executive arm. Nigerias 2014 budget tax and economic analyses january 2014. The major drawback inherent in this theory is the definition of ones ability to pay. Pdf the nigerian government in recent has engaged in search for the appropriate policy strategy to. The world bank 2000 noted that taxes are a compulsory transfer of resources to the government from the rest of the economy. The chart in figure 1below shows the target and actual tax revenue collected from 2000 to 2014. Highlightsnigerias 2010 budget proposals 5 min read abuja, nov 24 reuters following are highlights from nigerian president umaru yaraduas statement on. Arnold 2011 found that personal income taxes are progressive with.
Macroeconomic determinants of tax revenue in nigeria 19702011. Nigeria government revenues 20102019 data 20202022. Policy basics is a series of brief background reports on issues related to budgets, taxes, and government assistance programs. Table 1 nigerias federal, state and local tax jurisdiction and assignment. State government tax collections covers taxes collected by each state during the fiscal year. People with higher incomes should pay more taxes than people with lower incomes. Speaker sir, i beg to move the bill intituled an act to apply a sum from the consolidated. Usually the government councils translate their services through budget as it has to do with financial plan or estimate of proposed income and expenditure for a particular period normally a year. Most of the problems besieging the nigerian economy today. The budget office is structured into six departments six operational departments and three units. Tax free retirement lump sums taken on or after 7 december.
The concept of paying taxes, be it federal or state, is relatively foreign to many nigerians. Taxation, revenue allocation and fiscal federalism core. After passing the budget, the senate adjourned till april 19, to give senators time for their political activities. The budget for the coming year appears to address key sectors of the economy with specific. A budget summary should be a standalone document, which could include a budget speech or a separately published executive summary. Thahane, ministry of finance and development planning, presented the budget for the 201112 fiscal year on the 14th february 2011, with the focus on, economic. Annual summary of tax revenue collected in nigeria from 2000. The various income taxes were used as a proxy for tax reforms. The pkf worldwide tax guide 201617 wwtg is an annual publication that provides an overview.
The personal income tax rate in nigeria stands at 24 percent. Summary of 20 budget measures policy changes pdf irish version pdf taxation annexes to the summary of 20 budget measures pdf economic and fiscal outlook 20 pdf. The united states census bureau conducts two surveys of state and local government tax collections. Budget 20 financial statement by the minister for finance. Department of economics, banking and finance, babcock university, ilishan remo, ogun state, nigeria 2. The main thrust of fiscal policy in the 2011 budget was to ensure fiscal. Unlike some parts of the world where almost everyone, regardless of their position or income pays some form of incomerevenueproperty taxes on a regular basis, taxes are only. Taxes and levies approved list for collection act 1998 value added tax act 1993 vat amendment act 2007 federal inland revenue service establishment act 2007 personal income tax act 2004 personal income tax amendment act 2011 money laundering prohibition act 2011 iii.
Provide a forecast of revenues and expenditures enable the actual financial operation of the business to be measured against the forecast. The budget of a government is a summary or plan of the intended revenues and expenditures of that government. The three main sources of federal tax revenue are individual income taxes, payroll taxes, and corporate income taxes. Financial statement online financial statement pdf budget publications. Year, 2010, 2011, 2012, 20, 2014, 2015, 2016, 2017. Tax policies in the budget are used to achieve macro economic goals. All the time series variables were nonstationary at. The general government deficit including budgets, extrabudgetary funds, the fuel subsidy, and net accumulation in the excess crude account was reduced from an estimated 5. Budget 2012 financial statement by the minister for finance. This page provides nigeria government budget actual values, historical data, forecast. World banks doing business 2011 report asserted that while ghana 78, south africa 24, and nigeria ranks 4.
Center on budget and policy priorities where do federal tax revenues come from. Welfare effects of taxation on the nigerian economy osundina c. Nn n fund generation business competitiveness socioeconomic impact attract investment taxes are a vital and increasingly reliable source of revenue to the budget of the federal government. The magnitude of existing deficits provides a strong argument for, at least, monitoring tax efforts in the near future. Nigeria s 2014 budget tax and economic analyses january 2014. Most developed countries are less faced with the problem of deficit budget due to their strong fiscal structure while their developing counterparts are seriously faced with it see sahan and bektasogh, 2011. Other classifications of taxes are direct or indirect classification by incidence. Fiscal consolidation, inclusive growth and job creation. Fiscal deficit and the productivity of the nigeria tax system, 19702010 article in journal of sustainable development 54 march 2012 with 44 reads how we measure reads. It appears more reasonable and just that taxes should be levied on the basis of the taxable capacity of an individual. Tax and spending measures are proposed to improve investment and trade performance, enhance science and technology, accelerate job creation, boost small enterprise development and to strengthen rural development and emerging farmer support.
On tuesday december 2011, the president of the federal republic of nigeria presented the 2012 federal budget proposal to the joint session of the national assembly under the theme fiscal consolidation, inclusive growth and job creation. The budget office of the federation was established to provide budget function, implement budget and fiscal policies of the federal government of nigeria. Nigeria personal income tax rate data, historical chart, and calendar of releases was last updated on february of 2020 from its official source. Nigeria recorded a government budget deficit equal to 2. In all oecd countries, governments collect revenues through taxes and redistribute this public money, often by obligatory spending on social programmes such as education or health care. World banks doing business 2011 report asserted that while ghana 78, south africa 24, and nigeria ranks 4 out of 183 countries surveyed on the ease of paying taxes due to various factors. Nigeria with a budget of n4,97 trillion for the year 2011, representing 12% increase of 2010 annual budget uneghu and irefin, 2011 shows that taxation is one of the ways. Market taxes and levies where state finance is involved. It is also perceived that both tax avoidance and tax evasion are linked with shadow economy and schneider and enste 2000 as cited by faseun 2001 reported that. The effects of tax revenue on economic growth in nigeria. Public disclosure authorized nigeria economic report.
Nigeria 2010 budget breakdown by nairabrain on nov 25, 2009 with comments 2 4,052 views infrastructure development topped the federal governments agenda in the capital expenditure of the n4. Tax expenditures affect 1 the budget balance, 2 budget prioritization in allocation, 3 the effectiveness and efficiency of fiscal resources, and 4 the scope for abuse by taxpayers, government officials and legislators. The excess of retirement lump sum payments over that amount will be taxed at the taxpayers marginal rate of income tax. Department of economics, banking and finance, babcock university, ilishan remo, ogun. Particular menace in nigeria tax system is tax evasion occasioned by where taxpayers pay taxes and yet provide own infrastructure, increasing costs to taxpayers etc. Introduction on thursday 19 december 20, the minister of finance on behalf of the president of the federal republic of nigeria presented the 2014 federal budget proposal to the national assembly under the theme budget for job creation and inclusive growthposed. One of the reasons being that some of these ministries still operate an ineffective.
Details of public revenues nigeria oecd statistics. Taxation plays several key roles in the budget of a statecountry. Mark yes if access by mail order or by internet, if internet service is readily available outside the capital andor big cities. August 2015 the federal government budget 2015 was themed a transition budget with the focus on.
Nigeria s president, muhammadu buhari presented the 2020 budget on 8 october 2019, to the joint session of the national assembly. By way of preliminary test, the augmented dickey fuller was employed to test for unit root. Under companies income tax act you have to pay companies income tax if you are a resident or nonresident company incorporated in nigeria. A budget is an essential aspect of individual,organisation and government financials. Government has further reduced annual domestic borrowing to finance the budget deficit from n852 billion in 2011, to n744 in 2012, and now to n577 billion in 20.
Detail includes up to 25 tax categories per state, plus summaries. Pdf macroeconomic determinants of tax revenue in nigeria. It is evident from the opinions expressed in the foregoing theories that petroleum income can. Budgets may be yearly, quarterly, monthly, weekly, daily or other period lucey, 1996. Nigeria personal income tax rate 20112020 data 2021. Tax expenditures in oecd countries oecd publication oecd. The national tax policy is an initiative of the federal government of nigeria which is being. Revenue implications of nigerias tax system in nigeria 1. The year 2011 is a distinguishing year for nigeria. The national tax policy seeks to provide a set of guidelines, rules and modus operandi that would regulate nigerias tax system and provide a basis for tax legislation and tax administration in nigeria. Nigerias minister of finance, budget and national planning has announced fiscal stimulus and other interventions in response to covid19 pandemic and the.
Personal income tax act arrangement of sections part i imposition of tax and income chargeable section 1. A citizens handbook on 8 taxation in kenya governments in both developed and developing countries collect taxes to fund public services. Effect of tax avoidance and tax evasion in personal income. They may be levied in cash or inkind for example, involving mandatory labour, and they can be explicit or implicit. It was perhaps on the basis of the above dismal record that the jonathan administration so it seems set out to launch the 2010 budget which was. Shalizi and square 1988, budget deficit in 25 countries increased from 4. Although, the publication of the official gazette in january 2012 finally laid the matter to rest by clearly stipulating the effective date of the law to be june 14th 2011. The fiscal countrys budget goes to debt retirement, defense.
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