European Journal of Scientific Research ISSN 1450-216X / 1450-202X Vol. 154 No 3 November, 2019, pp.312 -327 http://www. europeanjournalofscientificresearch.com Historical Persepective of Tax Laws in Nigeria; from the Inception of Colonial Rule to 2019 Ademola Taiwo Senior Lecturer, Department of Jurisprudence and Public Law School of Law and Security Studies, Babcock University Ilishan-Remo, Ogun State, Nigeria E-mail: [email protected]; [email protected]; Tel: +2348130948386, Adeyinka Ilori Research Fellow, School of Law and Security (LSS) Babcock University, Ilisan Remo, Ogun State; E-mail: [email protected] Tel: +2348164642583 Eunice Emenike Research Assistant, School of Law and Security Studies Babcock University, Ilishan-Remo, Ogun State, Nigeria E-mail: [email protected] Abstract Civilisation of Nigeria particularly with regards to modern taxes and its enabling statutes begun with the intrusion of the British into Nigeria. However, the evidence of various existing taxes in Nigeria long before the British set foot in Nigeria testifies that the issue of tax in Nigeria is a practice of great antiquity. It was therefore of great importance for laws to be created to govern tax and taxation in Nigeria. These laws have evolved over time to include and subtract certain matters and taxes; and today, we have laws which are suitable for the current society. Nevertheless, the main theme of this article is to trace the history of tax laws in Nigeria particularly from the inception of colonial regime to 2019. The main method of collecting data is through application of secondary means by making use of scholarly published books, online and internet materials. This paper recommends among others that, it is necessary for the current tax laws and relevant statutes be reviewed from time to time by the appropriate authorities to meet the current domestic and international challenges. Keywords: History, Perspective, Tax, Law, Colonial Rule Historical Persepective of Tax Laws in Nigeria; from the Inception of Colonial Rule to 2019 313 Introduction In order to understand the events of today, it is of vital important to consult and review the events of yesterday. That is the main objective of this article to delve into the historical perspective of Tax laws in Nigeria particularly from the inception of colonial regime in 1861to the present post independence day Nigeria. As a result, Marcus Garvey posited that a people without the knowledge of their past history, origin and culture is like a tree without roots. (Marcus Garvey) 1 Hence, this work seeks to copiously and extensively trace exhaustively and to great lengths the history of the laws regulating and regularising various taxes, ultimately focusing on Nigeria, from the inception of colonial rule till current regime, 2019. This work is of great importance as it encourages inter alia , learning about and from past actions, events and laws in order not to repeat the mistakes made in the past or to properly prepare and plan for subsequent years. Equally to pave for recommendations to help the current administration to boost the revenue generation particularly in the present era of instability in the prices of crude oil in the international market. Hitherto, the previous administrations have not been laid much emphasis on the alternate source of revenue apart from concentrating on the oil revenue which fetches 85% of the government annual finances. What is Tax? Many people pay taxes today, either because they want to or because they are made to, however, quite a number of people do not. The essence of payment of taxes was corroborated by Nixon, one time United State of American President, when he directed the citizen that “Make sure you pay your taxes; otherwise you can get into a lot of trouble” (Richard M Nixon) 2. This can be attributed to the fact that, not many people understand what taxes are and basic essence of charging and payment of same. It is a task that all administrations worldwide are engaged in. Tax is also a universal concept, no living human being interacting with one another that are involved in payment of one type of tax or another. That is, either one pays direct or pay indirect. It is trite to note that, the modern baby equally pays tax while the parents are shopping for the arrival of the baby. This fact was even attested to by Albert Einstein when he asserted that, the hardest thing in the world to understand is the income tax 3. That is, tax responsibility is the business of all and sundry. Hence, for any concept to be meaningfully discussed, it is necessary to proffer a definition(s) to provide a basic idea of what the term entails. Therefore, the term “tax” is not one that is amenable to a single definition. This is especially because definitions are developed based on the definer’s emotions, environment, background, idiosyncrasies, outlooks, inclinations, orientations and prejudices. 4The statutes and laws which border or relate to tax have not provided a legislative definition of the concept of tax. In other words, there is no definition of tax in all our laws relating to tax, hence, the diverse definitions from various scholars on the concept to date. The Oxford English Dictionary (1973) has defined tax as ‘a compulsory contribution to the support of government levied on persons property, income, commodities, transactions, etc, now at a fixed rate proportionate to the amount on which the contributions is levied’ Oxford Advanced Learner’s Dictionary (2006) defined tax as 1 Brainy Quote- History Quotes; www.brainyquote.com ; Last accessed on 2 nd August, 2019 2 ibid 3 Robert W. Wood , (September 20, 2013), 20 Inspirational Quotes...About Taxes; Forbes.. www.forbes.com . Last accessed on 1 st August, 2019. 4 Niki Tobi; (2006) Sources of Nigerian Law, Lagos, MIJ Publication, Akoka, Lagos. 314 Ademola Taiwo, Adeyinka Ilori and Eunice Emenike ‘money that you have to pay to the government so that it can pay for public services.’ It further concluded that ‘people pay tax according to their income and businesses pay tax according to their profits. Tax is also often paid on goods and services.’ The definitions provided by the Oxford dictionary on Tax has been criticised by some as being inadequate particularly because it has a limited view as to or on the purpose of tax. This was the opinion of Chris White H. in his book, Revenue Law: Principles and Practice . Chris White further posited that its description of tax base was irrelevant and that the definition placed “unnecessary emphasis” 5 on proportional taxation as opposed to progressive taxation. Abdulrazaq, M. T., a professor of tax law (1993), also tried to improve the definition by adding the fact that taxes are imposed under the authority of the legislature that they are levied for a public purpose. Aiyar’s Concise Law Dictionary (2009) provided an apt and encompassing definition in the opinion of M.M. Akanbi of the National Open University of Nigeria; School Of Law, where he defined tax thus; “A compulsory exaction of money by a public authority for public purposes enforceable by law and is not payment for services rendered.” The Black’s Law dictionary 6 defines tax as “A charge usually monetary imposed by the government on persons, entities, transactions or property to yield public revenue.” 7 Martinger D.C. also describes tax as “a pecuniary burden lay upon individuals or property to support the government and is a payment exacted by the legislative authority”. The Webster Business Dictionary defines tax as a charge or burden, usually pecuniary, laid upon persons or property for public purposes without any direct benefit to the people or property on whom these taxes and levies were imposed. Olugbenga S. Obatola in his work titled, The Rudiments of Nigerian Taxation , defined the concept tax as “a compulsory levy imposed by the government or any of the recognised authority of a state on the property, goods, services and people living in a given geographical area for the purpose of generating revenue to defray the expenses incurred by the government or authority on behalf of the people”. The word “tax” was further judicially defined in the Australian case of Mathew v Chicory Marketing Board (1938) 60 CLR 263 as ‘a compulsory exaction of money by a public authority for public purpose or raising money for the purpose of government by means of contributions from individual persons.’ Regardless of however the concept of tax is defined, practice has revealed that the term embraces all governmental impositions on persons, property, privileges, occupations and enjoyment of 5 Law of Taxation 1; Dr M. M. Akanbi National Open University of Nigeria School of Law. 6Olugbenga Obatola,(2014), The Rudiments of Nigerian Taxation; (Reprinted ; ASCO Publisher), 7 Bryan A Garner, Black’s law Dictionary; Tenth edition, USA, WEST publication, page 1685 Historical Persepective of Tax Laws in Nigeria; from the Inception of Colonial Rule to 2019 315 the people and includes duties, imposts and excises8. Certain ingredients must be present in the definition for it to be acceptable and regarded as a proper tax. These primary principles of an ideal tax include: • Compulsoriness of the levy as is established in Section 24 of the 1999 constitution of the Federal Republic of Nigeria which vests all citizens of Nigeria with the obligation to “declare his income honestly, to appropriate and lawful agencies and pay his tax promptly” 9. To further ensure that this law is obeyed, tax offenders face sanctions in form of interest, penalties or even imprisonment 10 . Tax should however not be confused with other forms of compulsory contributions which appear to be similar to it (an instance being a charge for a government service) • Taxes have to be imposed on people, incomes, properties and transactions.