October 19, 2020

SB-Accounting

Accounting + Finance Blog

Tax law: Meaning and Explanations

Tax law: Meaning and Explanations
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For the administration of tax, effective collection of tax revenue and to ensure that no one is above the law, there are tax laws guiding every aspect of the taxation of a country. Understanding why these matters, let’s begin by defining tax law and star the several laws in Nigeria guiding taxation.

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What’s tax law?

It is a body of rules and regulations that guides how tax administration collects taxes from citizens.

It can also be defined as laws created by the government to impose taxes on its citizens through an administration.

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Key Explanations

It is a body of rules. Tax laws are rules and regulations inscribed in an Act or degree enacted by the legislative arm of government. The rules are voluminous and only those that specialised in the laws can vividly explain it in a comprehensive manner.

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Such rules and regulations also include penalties and fines for failure to pay taxes as and when due. It also contains the authorities responsible for the collection of a particular type of tax.

It is created by the government. The legislative arm of government is responsible for creating and amending tax Acts. However, such law cannot be in force. The president of the country must approve it. The president approves it by appending his or her signature on the bill.

Establishing a law is one thing, ensuring that citizens comply is another. The executive arm of government imposes the laws on the citizens. This is to ensure that its citizens pay surcharges as and when due as well as punish anyone who fails to pay it.

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Tax laws in Nigeria

The following are the tax laws in Nigeria and the year they are enacted into law.

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Personal Income Tax Act (PITA) 2004

Company Income Tax Act (CITA) 2004 (as amended)

Petroleum Profit Tax Act (PPTA) 2004

Capital Gain Tax Act (CGTA) 2004 (as amended)

Value Added Tax Act (VAT) 2004 (as amended)

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Education Tax Act (ETA) 2004 (as amended)

Stamp Duty Tax Act (SDTA) 2004

These laws or acts specify how administrators collect taxes in the country and every other requirement from its citizens.

Conclusion

From the above, you may have known that tax collection is enabled by laws. Failure to pay such taxes by citizens will lead to the wrath of the law. Also, taxes are of different categories. Each of these categories is regulated by separate tax law.

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