Critique of company income tax act and its impact on investments in Nigeria

Abstract

The political, economic and social development of any country depends on the amount of revenue generated for the provision of the common needs of people in any given country. Taxes and investments are among the major sources of revenue generation and wealth creation in Nigeria. The problem with combining taxation and investment as sources of revenue generation is that, an inverse relationship exists between them, with the implication that an increase in taxation leads to a decrease in investments, which will in turn result to a poor growth of the economy. Due to the over-reaching socio-economic benefits of taxation, Nigeria like many other countries, have unduly over-stretched their tax revenue pursuit, to a worrisome point of making taxes an impediment to the growth of other sources of revenue such as investments. Though, the Finance Act introduced some changes to the Companies Income Tax Act and other taxing statutes in a bid reform domestic tax law to align with global best practice, introduce tax incentives for investment in infrastructure and capital markets to avoid tax domination of investments, this article therefore criticizes the Company Income Tax Act and its negative effects on investments in Nigeria, with a view to pointing out provisions that are capable of impeding investments in Nigeria

Keywords: “Companies”, “Income”, “Profits”, “Tax”, “Investments”.