SOURCES OF TAX LAW IN NIGERIA

What makes a law what it is, is vital to governing the country.

CHAMAN LAW FIRM

5/26/2022 2 min read

SOURCES OF TAX LAW IN NIGERIA

What makes a law what it is, is vital to governing the country. In Nigeria, laws developed have been reformed, re-enacted, repealed to make up what it constitutes today.

The sources of tax law can be divided into primary and secondary sources. Primary sources can be referred to the internal laws and rulings while secondary sources are external influences on the law.

Taxing is a form employed by the government of the country to provide for expenditures and pay officials in certain ranks. Tax law has its various sources which would be seen below.

PRIMARY SOURCES OF TAX LAW IN NIGERIA

From the onset, we are equipped with the knowledge that the 1999 constitution of Nigeria is the foundation of the sources of tax law in Nigeria. The constitution gives power to the bodies in charge to regulate activities concerning tax in the country.

Tax law is influenced by different factors in the country. In Nigeria, one of the major forms that impacts the trajectory of tax law is the decisions of the powers under the constitution. The tax sector is managed by the legislative power according to the 1999 constitution (Part 1 Second Schedule) of the country. The Federal Government has the most authority over salient areas in the country.

Collection of tax is also a concurrent duty which means the State and Federal government may handle the matter where necessary. However, there have been arguments on the legitimacy of the power of the state to govern the matter.

Another source is the interpretation of tax laws by the court. Based on their literal, mischief or golden rule interpretation of the laws, it becomes a sort of stare decisis for subsequent cases to follow and sets a foundation. This does not mean it becomes the ‘’new order of things’’ but gives an interpretation to ambiguous sections of tax laws.

Other sources may include rulings, circulars, orders, pronouncements circulated around authoritative powers and enforced by the appropriate bodies.

SECONDARY SOURCES OF TAX LAW IN NIGERIA

These are external influences of tax law in the country. Owing to the fact that Nigeria performs transactions with other countries, it is important to note that their laws would intermingle with that of ours. To ensure uniformity in tax laws and transactions, it is essential to create agreements that do not hinder these business activities.

These taxes are influenced by treaties which can be domesticated in the country or laws which can be interpreted to determine what duties are to be performed, what type of income is to provide for the tax payment etc.

Other sources include International laws, model laws among others. These all have to be properly agreed on so as to avoid confusions and bring a uniform conclusion to tax agreements.

In conclusion, sources of tax law come in both primary and secondary sources and have to be properly interpreted when dealing in such transactions to avoid confusion, delays or risk of double taxation.

NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com

WRITTEN BY CHAMAN LAW FIRM TEAM

EMAIL: chamanlawfirm@gmail.com

TEL: 08065553671, 08024230080