Administration of Companies Income Tax in Nigeria: Issues of Compliance and Enforcement

Abstract

All companies in Nigeria are required by the Companies Income Tax Act 2007, to pay tax to the federal government on incomes or profits made by them; however, Nigeria’s economy is characterized by low tax compliance and enforcement. Low tax compliance is a matter of grave concern in many countries especially developing ones like Nigeria because it limits the capacity of their respective governments to raise revenues for development purposes.  In the same vein, There is no gainsaying the fact that tax enforcement has become an essential aspect of tax administration in view of the ingenious ways corporate taxpayers, use to undermine the revenue generation process by not remitting what is due to government, under declaration of income as well as withholding revenue due to government for their own use etc. However, the question many Nigerians ask is, is there strict enforcement of corporate tax laws in Nigeria considering the low level of corporate compliance? This paper examines compliance and enforcement issues in corporate Tax administration in Nigeria. The paper suggests ways of addressing problems of low tax compliance and enforcement in Nigeria.