An Overview of the Imperatives and Challenges of the Nigerian Tax System

Abstract

Taxation globally is designed as one of the tools by governments to generate revenue as such, its
economic importance to Nigeria and most countries of the world cannot be overemphasized. Under
some specific laws, the three tiers of government being, the federal, state and local governments have
the responsibility of tax administration in Nigeria. However, the role of tax administration has changed
dramatically in the past decade, and the pace of change has accelerated sharply in recent years due to
the development and implementation of new technologies as well as the application of same to the
functions and processes of tax administration. Finding reveals that, the Nigerian tax system is
confronted with many challenges such as multiplicity of taxes, corruption, bad administration, non-
availability of data/database, tax touting, complex nature of the tax laws, minimum tax, and non-
payment of tax refunds among several others. Additionally, the research essentially recommended that
the various tiers of government should cooperate and support the relevant tax authorities to achieve
desired results in tax administration. Furthermore, it is recommended that efforts should be made to
streamline tax collection mechanism, as this in turn would ensure good, effective and efficient tax
administration. There is also the need for effective alignment with recent developments in tax
technology, in order to enhance the Nigerian tax system.