PREVIEW LAW OF TAXATION I
:: Taxes are the lifeblood of a government-Shell PDCN V Gov of Lagos.
:: The government needs finance to perform its functions which includes amongst others; the provision of social security, amenities, safety and justice for all… it is only reasonable that the governed should contribute for their communal welfare.
:: The law of taxation is a branch of revenue law. Revenue law deals with the fundraising means of government which include (amongst others): printing money, raising loans, charging for services and taxation. Taxation is not revenue law in itself but a means of raising revenue… therefore, a branch under Revenue Law.
:: With the recent fall in oil prices, Nigeria is shifting its focus to taxation and other sources of revenue generation.
:: Our taxing statutes have failed to clearly define what tax is.
:: There is no all-encompassing definition.
:: According to Davies, it is surprisingly impossible to define taxation.
:: According to Oxford Advanced Learner’s Dictionary (2006) Tax is; “money that you have to pay to the government so that it can pay for public services”.
:: According to Investwords.com, tax is ‘a fee charged by a government on a product, income or activity”.
:: According to Abdulrazaq, M. T in Principles and Practice of Nigerian Tax Planning: “taxes are imposed under the authority of the legislature for public purposes”.
:: A broader definition is provided in Ramanatha Aiyar’s Concise Law Dictionary (2009) “a compulsory exaction of money by a public authority for public purposes enforceable by law and is not payment for services rendered” This definition is more preferred as it highlights the essential features of taxation.
From all the definitions above, we should note that essentially tax is:
- A compulsory imposition: once a taxpayer falls within the ambit of the taxing provisions, he must pay the tax.
- Imposed by the government: (Federal, State or Local) through the legislature… Tax must be backed up by legislation… it must be reflected in a written law. Therefore, an imposition by an agency, public authority, group, club, body, society, etc. does not qualify as tax.
- Imposed for the good of the general public. Depending on the existing policy of the government.
- There is no benefit in return for the payment of tax. Meaning that the taxpayer should not expect the government to render a particular service to him in return for the payment of the tax. There is no Quid Pro Quo. No direct benefit in return for the tax paid. E.g. if a Lekki man’s tax is being used to develop Surulere, he should not complain. This principle that there is no quid pro quo in tax was restated in US V
:: Justice Nathan in Nichols V Ames recognised that tax can make or mar a nation. Benjamin Franklin has also declared that nothing is certain but death and taxes.
:: This refers to those involved/concerned in the tax regime/system. Stakeholders of taxation include:
- Tax Payers: Prof Sanni posits that these are the people that deserve to be listed first. The taxpayer is the person whom the compulsory tax liability falls upon. He is the person that pays the tax…
- The Legislature: established under Section 4 of the 1999 constitution… they make laws. In this case; tax laws.
Tax Authority and Statutory Bodies: The government authority responsible for tax administration and collection… e.g. the FIRS. The tax authority merely collects tax and cannot determine or amend
 The problem with this definition is that, a foreigner can still be liable to tax… not just a subject as Akanle posits.
 Another problem here is that tax is not imposed only on property… tax can be imposed on things other than property like, capital gains, VAT and so on
 See; Paragraph 1 national Tax policy Document.