Taxes are one of the sources of revenue for a country. In Nigeria, taxes are collected to fund recurrent and capital expenditure. One important term in taxation is tax yield. What is it? What are some of its features?
Definition of Tax Yield
It is the return in form of revenue generated in a country by the administrators of tax.
It can also be defined as the periodic returns collected by tax administrators as a source of income for the government of a country.
It is a return. All tax liabilities paid by taxpayers are referred to as tax returns. Pay As You Earn (PAYE), Company Income Tax, Value Added Tax (VAT), Withholding tax, Petroleum Profits among others are tax returns available to the government of Nigeria to pay its expenditure for any particular year.
Tax yield is synonymous to tax revenue. In fact, the term means tax revenue. Tax revenues are divided into three. Revenue to Local Government, State and the Federal Government. To start with, tax yields from local governments are mostly levies from stores on the street, stalls in community markets, levy on tickers and so on.
State Government tax revenues emanate from personal income tax, PAYE, withholding tax, and more. While the Federal Government, on its parts, encompasses all types of tax liabilities including capital gain tax, and petroleum profits tax.
Also, the tax yield can be seen as an aggregate of taxes collected from the three tiers of government. It can be examined based on each tier of government. These revenues can be viewed from the perspective of each type of taxes.
Furthermore, tax yield may include penalties fro failure of tax payers to comply with tax laws. Most times, citizens (individual or corporate) may be unaware of certain type of taxes that must be charged at source. As a result, this defaulters ends up paying huge penalties to tax authorities.
Tax yield is revenue the administrators of tax collected from the citizens. The yield is from each type of taxes. And the income goes to each tier of government based on their right to collect the tax liabilities.