Reflections on the Extant Finance Act on Administration of Personal Income Tax in Nigeria

Abstract

The current paper reflects on the rationale behind several initiatives sustained so far by stakeholders to review the personal income tax in Nigeria to attain international best practices. The supposed crescendo of the initiatives was attained recently when President Muhammadu Buhari assented to the Finance Bill into law, now known and referred to as the Finance Act, on 13th January, 2020. The new law seems to have brought along some notable changes in the administration of the Personal Income Tax (PIT) in Nigeria. Prior to the emergence of the new legislation, agitations for the review of the then PIT law were indeed striving., Thus with the unveiling of the new Act, experts have asserted that a new vista has been opened to promote fiscal equity in PIT by mitigating regressive taxation with its effect on reform of domestic income tax laws. It is also envisioned that the new Act shall align PIT laws with global best practices as well as introduce tax incentives for investments in the private sector driven economy. However, some stakeholders, and a vocal size too, have been of the opinion that the Finance Act has not only failed to address the pre-existing nagging issues in PIT laws such as double and multiple taxation, fate of non-filers and retention of some other wise abrogated PIT laws, among others. Thus, in that light, the current paper is thus, an academic contribution to firstly recapture the pre-Finance Act era coupled with the expectations of the new law on the administration of PIT in Nigeria and to highlight on the other hand, the challenges still trailing it’s inauguration with a resolve to forging a way forward.