DEFINITION OF TAX

Tax is a compulsory levy imposed by the government of a country on individuals and corporate entities in respective of return of service expected from that government.

ADMINISTRATION OF TAXES
The administration of tax is vested in various tax authorities depending on the type of tax under consideration.
In Nigeria, there are two authorities namely;
(a) Federal Board of Inland Revenue, and
(b) State Inland Revenue Board. The Local Government authorities in states also have specific tax functions

There are various Act in respect of each type of tax under consideration which are;
i) Companies Income Tax Act,Cap. C21, LFN 2004: This imposes tax on the incomes of companies other than corporation soles and companies engaged in petroleum operations (upstream operation).
ii) Education Tax Act, Cap. E4, LFN 2004 which levies education tax on the assessable profits of companies registered in Nigeria.
iii) capital Gains Tax, Cap. C1, LFN 2004: this act imposes tax on capital gains arising from disposal of chargeable assets.
iv) Petroleum Profit Tax Act, Cap. P13, LFN 2004 levies tax on the profits of companies engaged in oil exploration.
v) Personal Income Tax Act, Cap. P8, LFN 2004: it imposes tax on the incomes of productive individuals and corporation soles.
vi) Value Added Tax Act, Cap. V1, LFN 2004 imposes tax on the supply of goods and services made by incorporated companies and other business organisations.
vii) Stamp Duties Act, Cap. S8, LFN 2004 charges duties on specified instruments listed in the Acts.

ORGANS OF TAX ADMINISTRATION IN NIGERIA

1.  Joint Tax Board (JTB): section 86 of the Personal Income Tax Act establishes the Joint Tax Board
composition;
a) Executive Chairman of the Federal Inland Revenue Service as Chairman.
b) A representative from states of the federation experience in tax.
c) The secretary, who shall be ex-officio appointed by the Federal civil service Commission; and
d) The Legal Adviser of FIRS acts as the legal Adviser to the the JTB.

FUNCTIONS
The JTB is charges with the responsibilities of:
i. to promote uniformity both in application of personal income Act and in the incidence of tax.
ii. imposes its decision on matters of procedures and interpretation of Personal Income Tax on any State for the purpose of conforming with agreed procedures or interpretation.
iii. to advice Federal Government in respect of double taxation arrangement.
iv. to exercise the powers or duties conferred on it by the PITA and other Acts.
v. to advise Government on request, in respect of double taxation arrangement with other countries.


2.   FEDERAL BOARD OF INLAND REVENUE (FBIR): section 1 (1) of CITA vested the administration of the taxation of profit of incorporated companies to FIRS which is the operational arm of FBIR.

COMPOSITION
The Board comprises of;
a) the Executive Chairman experience in tax administration and appointed by the president.
b) the directors and HOD of Federal Inland Revenue Service.
c) Director of planning, research and statistics in the Federal Ministry of Finance.
d) an officer from NNPC not below the rank of an Executive Director.
e) a member of the Board of the National Revenue Mobilization Allocation and Fiscal Commission.
f) a Director from the Nigeria Customs Services.
g) a Director from the National Planning Commission.
h) Register-General of Corporate Affairs Commission.
i) the Legal Adviser to the FIRS.
A secretary shall be nominated by the Board from within the FIRS

FUNCTIONS
i. To administer the Companies Income Tax Act and other Tax Acs as may be vested in FBIR.
ii. To assess and collect companies income tax.
iii. To issue directives or guidelines on the interpretation of the provisions of the CITA and other Tax Laws.
iv. To advice the Fed. Govt. of Nigeria through the Minster of Finance on tax matters including amendment to tax laws.
v. To account for the amount collected in a manner prescribed by the Minister of Finance.


3. STATE BOARD OF INTERNAL REVENUE (SBIR)
section 87 of Personal Income Tax Act creates the SBIR. its operational arm is SIRS.

COMPOSITION
The each state of the Federation Inland Revenue Board comprises of:
a) the chairman, who is the executive head of the SIRS
b) the Directors and HOD within the SIRS
c) a Director from Ministry of Finance
d) the Legal Advice
e) three other persons nominated by the commissioner for finance on their personal merit
f) the Secretary

FUNCTIONS
i. To ensures effective and optimum collection of all taxes and penalties due to the govt. under relevant laws. 
ii. Accounting for all amount collected in a manner prescribed by the state commissioner of finance.
iii. Making recommendation on tax policy, tax reform, tax registration, tax treaties and exemptions to JTB as may be required from time to time.
iv. Appointing, promoting, transfering and discipline of employees of the SIRS.

4. LOCAL GOVERNMENT REVENUE COMMITTEE
 section 90 creates Local Government Revenue Committee (LGRC) for each Local Govt. Area of a state.

COMPOSITION
Its comprises of:
a) the supervisor for finance as Chairman
b) three Local Government Councillors
c) two other persons experience in revenue matters to be nominated by the chairman of the Local Governments.

FUNCTIONS
The committee shall be responsible for the assessment and collection of all taxes, fines and rates under its jurisdiction.

REGISTRATION OF TAXPAYERS

All incorporated companies shall register with FBIR while unincorporated entities, individuals and body of individuals shall register with SBIR.

-- Incorporated companies are expected to register within eighteen months of incorporation or six month after the end of its first accounting period.

-- Unincorporated companies and body of individuals are expected to register with the relevant tax authority within 3 months of the year.