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CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The government of Nigeria, like others in different parts of the world, has legislative powers to impose on its citizens, any form of tax and at whatever rate it deems appropriate (Chartered Institute of Taxation of Nigeria [CITN], 2002). According to the Oxford Advanced Learner’s Dictionary tax can be defined as money that has to be paid to the government so that it can provide public services. Similarly, The Black Law Dictionary defines it as: “Monetary charge imposed by the government on persons, entities or property, levied to yield public revenue” , In addition, Cooley in “The Law of Taxation” defines taxes as: “Enforced proportional contributions from persons and property levied by the state, by virtue of its sovereignty, for support of government and for all public needs” Therefore, in a simple term, taxation is a compulsory contribution levied by a sovereign power on the incomes, profits, goods, services or properties of individuals and corporate persons, trusts and settlement. Such taxes when collected are used for carrying out governmental functions for example, maintenance of law and order, provision of infrastructure, health, and education of the citizens, or as a fiscal tool for controlling the economy. The history of taxation in Nigeria dates back to the pre-colonial era. Before the colonization of the dierent entities which were later amalgamated under the name Nigeria, there were dierent systems of taxation existing in the forms of compulsory services, contribution of goods, money, labour, etc. amongst the various kingdoms, ethnic groups and tribes controlled by the Obas, Emirs, Ezes, Attahs, Ohinoyis and Amanyanabos, in order to sustain the monarchs (CITN, 2002).

However, Nigerian taxation in its present form is traced to the establishment of the British colony in Lagos on August 6, 1861 and subsequent amalgamation of the Southern and Northern protectorates of Nigeria in 1914. The administration of taxation in Nigeria is vested in various tax authorities depending on the type of tax under consideration. These three authorities are 

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