Research On The Companies Income Tax Act Of Nigeria

Nigeria is now the second largest economy in Africa, and the largest economy in theWest Africa Region, is ranked33rd in the world in terms of GDP of2012. Since theestablishment of Sino-Nigeria diplomatic relations, China and Nigeria have many closelyactivities in trade and economy. Nigeria has already become our second largest tradingpartner in Africa right now. Tax is the major source of state revenue, the Nigeriagovernment collected taxes about10trillion naira over the past10years. Company as oneof the most important market body, naturally became the primary providers of taxrevenue.Nigeria was one of the former British colonies, in some extent, its laws adoptedBritish laws. The Companies Income Tax Ordinance was enacted in1939, this is the firstlaw about companies income tax in Nigeria, and is almost the reproduction of theCompanies Income Tax Act of the United Kingdom. With the continuous development ofeconomy and the transformation of the legal system, the Companies Income Tax Act ofNigeria has experienced a few times significant changes, and it become closer to Nigerianreality. In2004, the Nigeria government promulgated the current Nigeria CompaniesIncome Tax Act, this act was formally implemented in2007.Current Companies Income Tax Act of Nigeria is based on the Companies IncomeTax Act of1990and other relative laws. It composed of14chapters, which contains116provisions. Its content is more rigorous than before, and its system is more complete. Thefirst chapter to six chapter include the main body of corporate income tax, rates of tax, taxpayable, preferential policies and other substantive provisions. The last eight chapterscontain tax management, collection and payment of tax, offences penalties and otherprocedural provisions.For better improving the Nigerian tax reforms, the government established a StudyGroup in2002, and a Working Group in2004. The aim of Study Group and WorkingGroup is review all the tax legal documents and recommending improvements. Theirsubmitted reports to the government about the reform of Nigeria Companies Income Tax,part of the recommendations were adopted by lawmakers and reflect in current CompaniesIncome Tax Act of Nigeria. But, there are still many problems of CITA, e.g., high tax rate,big discretionary power of tax managers, disorder of tax collection and managementregulations. Those problems may hinder the management of tax work. Hereto, the lawmaker can lower the companies income tax rate, make special law to restrict the powerof law-executors, and put management regulations in one chapter or a single act to make itworks well.