Taxation of the legal profession in Nigeria: A legal appraisal

Abstract

Lawyers with practicing firms pay tax as self-employed persons based on their incomes either as individuals, partners or registered firms, others in employment pay through Pay As You Earn Scheme (PAYE). Outside the controversy as to which type of taxes should members of the legal profession ought to be subjected to, there is the major controversy of which relevant tax authority is responsible or should exercise power to collect which tax to be paid within the profession or firms registered as business name. This paper sought to unravel the particular taxes members of legal profession are to pay. The study is significant to lawyers, members of other professions, researchers and students to mention but a few. Doctrinal method of data collection was adopted using analytical and descriptive approaches in reviewing the constitution, tax laws, fiscal regulations and opinion of tax experts on the research issue. It revealed that whichever category a lawyer falls into, he must pay taxes for as long as he earns income except where the law provides otherwise. Moreover lawyers, in different fields are expected to pay or will pay different taxes. By the position of the extant laws, legal firm is not a limited liability company since the practice is under a mere registered business name as provided under Companies and Allied Matters Act. As a registered business name, a legal firm is qualified as an individual subject to personal income tax and other taxes but excludes companies’ income tax.