TAXATION IN NIGERIA

Taxes are a significant source of revenue and a major source of income to the government. Taxes are considered different from other sources of government revenue because it is a compulsory charge. In the 19th century, the main purpose for which tax was imposed was for revenue to the government but today, it is seen to be used for different purposes other than fiscal purposes. Taxation being a major source of funding to all three tiers of government is highly important in helping the government achieve its macroeconomic objectives.

The Nigerian government has over the years received about 82% of her revenues from the oil and gas sector to the neglect of the non-oil sector. Heavy dependence on oil and gas revenue has not been the best for the Nigerian economy due to the volatility of oil prices  causing the size of public spending to fluctuate. The huge oil  windfall has  led to pervasive fiscal indiscipline, unethical practices and lack of probity and transparency on the part of the government and the utter neglect of the non-oil sector of the economy.

However, the narrative is changing. The revenue inflow to the federation account from the oil and non-oil sector increased by 3.28 percent to N1.26 trillion in July 2022 from the N1.22 trillion recorded in June. Tax revenue from the oil sector to the Federal Inland Revenue Service (FIRS) amounted to N191.7 billion, while the non-oil sector contributed the highest for the month at N444.65 billion.