DIVIDEND TAXATION IN NIGERIA: ADDRESSING DOUBLE TAXATION,CHALLENGES, REFORMS, AND PROSPECTS FOR ECONOMIC GROWTH

Abstract

Dividend taxation and withholding tax are critical components of Nigeria’s tax system, influencing revenue generation, investment decisions, and overall economic growth. However, the current legal framework presents significant challenges, including issues of double taxation, administrative inefficiencies, and inconsistencies in tax laws. This study adopts a doctrinal methodology to critically analyze the statutory provisions governing dividend taxation and withholding tax in Nigeria, focusing on the Companies Income Tax Act (CITA), the Personal Income Tax Act (PITA), and relevant provisions of the Finance Acts. It examines judicial interpretations and scholarly perspectives on the applicability and effectiveness of these laws in achieving fiscal sustainability.
The study finds that while recent legislative reforms have sought to improve tax administration and revenue mobilization, persistent gaps in legal clarity, enforcement mechanisms, and tax treaty applications continue to hinder optimal compliance and economic benefits. The study recommends legislative refinements, clearer regulatory guidelines, and enhanced legal interpretations to create a more efficient and investor-friendly tax system. A well-structured dividend taxation regime is crucial for boosting investment, fostering economic growth, and ensuring equitable tax administration in Nigeria.