Various taxes are levied upon the income, wealth or gain of an individual, family. These have led to increase in record of dearth of small and medium scale enterprise smes. Effects of multiple taxation on business survival in nigeria. Specifically, local governments collect taxes on personal, social and commercial permit fees. Multiple taxation and small and medium scale enterprises. A multiple tax refers to the tax system in which taxes are levied on various items or bases. The effects of multiple taxation on small and medium scale businesses are outlined inorder for drastic measures to be taken to tackle these challenges and meet the prospects of the general public so that revenue from tax policy to the government can be increased. In addition, import duties are generally imposed on all types of digital equipment, whether they are consumeroriented such as smartphones or needed by infrastructure operators such as switches and servers. Against this back drop, this project examines the effects of multiple taxation on business survival in nigeria. Based on international trade convention, every country is allowed to adopt laws, rules and regulations that govern its trade relationships with other countries in a way that enables it.
In nigeria, income tax returns are prepared on preceding years basis and these returns are due for submission to the tax authorities within six months of the relevant yearend. What is the relationship between single and multiple taxes. Yet, tax administration was found to have no insignificant effect on tax payment in nigeria tax system. The dishonest practices by some tax officials also, pose a serious threat to effective tax administration in nigeria especially, when such practices are capable of having demoralizing effect on the honest tax payers. Taxation is one of the major fiscal policies the government of any nation can use to achieve economic stability and in the financing of capital expenditure. Impact of multiple taxation on businesses in nigeria. Various taxes are levied upon the income, wealth or gain of an individual, family and business firm by the. A study carried out by the federal office of statistic shows that in nigeria, small scale enterprises make up of 80% of the economy ariyo, 2005. This study, surveyed fifteen 15 selected smes within the abuja metropolis precisely amac area, with a population of four hundred and fifteen 415 respondents and a. The realities of taxation of taxation in the informal.
Thus, the term seems to be peculiar to nigerian fiscal lexicography. The study revealed that the three explanatory variables multiple taxation, tax rates, and tax incentives accounted for 43% of the variability of smes sustainability in ondo state with a p value. Meanwhile, it is worthy of note that nigerias double tax treaties is a far cry from the number which other developed and developing countries have. Multiple tax practices and taxpayers noncompliance. This study gives a clear insight into the various ways in which tax policies in nigeria can be executed efficiently to still favor small businesses and how some taxation policies in nigeria can be properly tackled. Impact of multipletaxation on competitiveness in nigeria. Multiple taxation financial definition of multiple taxation. A situation in which the same earnings are taxed more than twice. Introduction the precise origin of multiple tax practices in nigeria is a little bit obscure. Multiple taxation is the levying of tax by two or more jurisdictions on the sense declared income in. Effect of multiple taxation on business survival in nigeria abstract this study is on the effect of multiple taxation on the performance of small and medium scale enterprises. Taxation is a major source of revenue to the government. Multiplicity of taxes is not an established term in the field of taxation as such.
It then passes on some of those earnings to shareholders as dividends, on which they must pay a capital gains tax at the federal level and then again at the state level. The study examined the effects of multiple taxation on the growth of small and medium enterprises smes in nigeria. Among the factors responsible for these untimely closeups are tax related issues, ranging from multiple taxations to enormous tax burdens etc. Effects of multiple taxation on the performance of small. As a matter of fact, some business including manufacturing companies have shut down production while in some cases, have relocated their factories to other west african countries which are. According to the national tax policy document, multiple taxation occurs where the tax, fee or rate is levied on the same person in respect of. Tax types in nigeria is what many nigerians are not aware of. This is in spite of the fact that ignorance is not an excuse of the law. According to osagie 2012 tax environment in nigeria especially the policy on multiple taxation increases the cost of doing business in the country. Over the years, small and medium scale enterprises have been an avenue of job creation and the empowerment of nigeria s citizen, providing about 50% of all jobs in nigeria and also for local capital formation. In many government policies, small and medium scale enterprises are usually viewed and treated in the same light. There are over fifty taxes and levies collected by the federal, state and local governments in nigeria. The realities of taxation of taxation in the informal sector in enugu state. There is need to avoid repetition of taxation in nigeria.
Factors that affect tax comp liance among small and. There isnt enough information available to tax payers in nigeria. Many of them have covered all its ramifications while some have effectively appraised the problem of tax administration in. Implication of multiple taxation on the performance of small scale enterprises. To this end, it is imperative that nigeria leverages on its status as the largest economy in africa and takes advantages of the benefits dtts offer. Department of accounting, kogi state university, anyigba, nigeria. This research work is on effects of multiple taxation on business survival in nigeria. Multiple taxation positively affects smes in nigeria. In nigeria, nobody can dispute the fact that though this taxes are been collected, they are.
The nigerian government in attempt to raise revenue and enhance the economic development of nigeria has subjected many firms to multiple taxations which they are mandated or made compulsory to pay irrespective of the sector the business firms operate or else take the wrath of the law a survey carried out by the manufacturers association of. The aim is to investigate the extent to which multiple taxes affect the. Obayemi, acti senior lecturer with lagos state university, lagos i. Consequently, economists now widely acclaim multiple tax system. The tax system in nigeria is made up of tax policy and tax laws, stratified into tax assessment. Introduction in nigeria, the tax system is progressive, with a top marginal rate of 25% with effect from 1996. Taxation in nigeria plus history of taxation in nigeria. Final year research project topics, ideas and materials in pdf, doc download for free. It proved inefficient in solving the real purpose behind a good tax system. As an individual or a business in nigeria, you are liable to the payment of any tax and you fail to pay it, ignorance of the law cannot be used as a genuine excuse for such act.
Therefore, this study was conducted using smes in zaria, northcentral nigeria to evaluate and rank the factors that encourage noncompliance with tax obligation by smes. A countrys tax policies and systems are greatly related with business. For instance, the uk currently has dtts with 1 countries, canada has 92 dtts and malaysia has 68 dtts. The direct burden of official taxation on firms in nigeria is compounded by the administrative burden to comply with these taxes which is significantly higher than competitors. Taxation is one of the major fiscal policies the government of any nation such as nigeria can use to achieve economic stability and in the financing of capital expenditure.
Continued from page 3 a mockery of the reality on the ground. Various taxes are levied upon the income, wealth or gain of an individual, family and business firm by the government for the purpose or benefits of the general. Multiple taxation is a situation in which the same earnings are taxed more than once. Impact of multiple taxation on africa trade policy notes. Revenue generated from tax enables government performs its functions effectively. Tax is an important stream of revenue for governments development projects. The tax revenue collection in nigeria faces some formidable problems which includes the high tax rates and complex filing procedures, multiple taxation and lack of proper enlightenment, lack of statistical data, poor tax administration, and inability to prioritize tax effort, multiplicity of taxes and increase in underground economy. 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. Mombert and nihal, 24 researched into impact of multiple taxation and competitiveness in nigeria and concluded that the multiplicity of taxation, and the administrative burden created by the.
Effect of multiple taxation on smallmedium enterprises in nigeria dr. The study will afford us the opportunity to know the roles taxation play in the nigeria economy such roles includes. The nigerian perspective is because the bulk of revenue needed for development purposes is derived from oil. However, izedonmi 2010 noted that multiple tax practices became more pronounced and prevalent in the late 1980s, which. Over the years, small and medium scale enterprises smes have been an avenue of job creation and the empowerment of nigerian citizens, providing about 50% of all jobs in nigeria and also for local capital formation. Professor of accounting, department of accounting, kogi state university, anyigba, nigeria. This study is on the effects of multiple taxation on the performance of small and medium scale enterprises smes. This research is based the effects of multiple taxation on smallmed ium enterprises in nigeria focused on finding the changes.
Effect of multiple taxation on the performance of small. Review of related literature taxation is one of the major fiscal policies the government of any nation such as nigeria can use to achieve economic stability and in the financing of capital expenditure. Multiple taxes, taxpayers, attitude, nigeria, efficient, effective 1. Impact of multiple taxation on businesses in nigeria the. In addition to the plethora of taxes and levies in nigeria, it is more worrisome where different taxes or levies on the same income or profits base is imposed by federal. Tax payment is a voluntarily contribution imposed by the government on personal income earners, companies, investors, exporters, importers etc. Therefore, the income tax returns for an accounting year ended december 31, 2014, were due for submission by june 30, 2015. This involves tax compliance, rules and guidelines, which can cause uncertainty and cause great leakages in the taxation system. Impact of multiple taxation on small and medium scale. Pdf impact of multipletaxation on competitiveness in.
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