The administration of taxes in Nigeria rests on various tax authorities depending on the type of tax under consideration.
Broadly speaking, we have three tax authorities, as shown below.

  1. The Federal Board of Inland Revenue (FBIR) 
  2.  The State Internal Revenue Board (SIRB) 
  3. The Local Government Revenue Committee 

The principles of fiscal federalism give the three tiers of government the right to collect taxes within their areas of jurisdiction. The enabling law in respect of each type of tax contains a provision as to the body charged with the administration of such a tax. Each body with its composition had been discussed in details.


At the end of this unit, you should be able to:

  1. discuss the different organs charged with the responsibility of tax administration in Nigeria 
  2.  enumerate the various tax laws in Nigeria 
  3.  explain the functions and composition of the Joint Tax Board  outline the procedures for registering taxpayers. 


3.1 Tax Laws

Taxation in Nigeria is governed by the following laws.

  1.  Personal Income Tax Act (PITA) Cap. P8, LFG 2004 – this enables the imposition of tax on incomes of individuals, sole traders and partnerships. For example, Pay – As – You – Earn (PAYE) by employees is covered by the provisions of this act. 
  2. Companies Income Tax Act, (CITA) Cap. C21, LFN 2004 – this imposes tax on the incomes of companies other than sole proprietorships, partnerships, and companies engaged in downstream petroleum operations. An example is corporation tax- with rate fluctuating between 30% – 45%, depending on yearly fiscal policies of the federal government. 
  3. Petroleum Profits Tax Act, (PPTA) Cap. P13, LFN 2004 – this imposes tax on the profits of companies engaged in upstream petroleum operations. 
  4. Value Added Tax Act, (VAT) Cap. VI, LFN 2004 – which replaced sales tax in 1994. It imposes tax on the supply of goods and services by businesses that are not specifically exempted from the payment of such a tax 
  5.  Stamp Duties Act, (SDA) Cap. 58 LFN 2004 – these are charges on all contract documents listed in the Act. 
  6. Education Tax Act, (ETA) Cap. E4, LFN 2004 – this imposes education levy/tax on the assessable profits of all registered companies in Nigeria. 
  7.  Capital Gain Tax Act, (CGTA) Cap. C1, LFN 2004 – this imposes tax on capital gains arising from the disposal of chargeable assets listed in the act. 


Identify other tax legislations not captured above.

3.2 Organs of Tax Administration: Federal Board of Inland Revenue (FBIR)

The administration of taxes on the profits of all incorporated companies, and income tax of the Armed Forces and residents of the Federal Capital Territory is vested in the FBIR whose operational arm is known as the Federal Inland Revenue Service (FIRS).
This is covered by section 1(1) of CITA.

3.2.1 Composition of the Board

The board consists of the following officers.

  1.  Executive chairman –to be appointed by the president. 
  2. All FIRS directors and heads of department. 
  3. The director of planning, research and statistics in the Federal ministry of finance. 
  4.  A member of the board of the National revenue mobilisation allocation and fiscal commission. 
  5.  An officer from NNPC not below the rank of an executive director. 
  6.  A director from the National planning commission 
  7.  A director from the Nigerian customs services 
  8.  Registrar–general of the Corporate affairs commission; and (i) The legal adviser to the FIRS 
  9.  A secretary (an ex-officio member) who shall be an employee of the FIRS. 

Any seven (7) members of the board shall constitute a quorum provided there is in attendance the chairman or a director of a department of FIRS.

Functions of FBIR

The functions of the board are listed below.

  1. Administration of CITA and other tax acts as may be vested in FBIR; 
  2. Assessment and collection of companies’ income tax; 
  3.  Accounting for all amounts collected in a manner to be prescribed by the minister of finance; 
  4. Advising the federal government of Nigeria through the minister of finance on tax matters including amendments to tax laws; and 
  5. Issuing directives or guidelines on the interpretation of the provisions of the CITA and other tax laws. 
  6. Setting up a technical committee to assist the board in the performance of its duties. This committee shall comprise of the executive chairman of FBIR as the chairman and all directors and heads of department of the FBIR, the legal adviser to FIRS and the secretary to FBIR as members. 

The technical committee shall consider and make recommendations to the board on all tax matters that require professional and technical expertise. Also, to advise the board on its powers and duties which it may not delegate except to the Joint Tax Board (JTB) with the consent of the minister.

3.2.2 State Board of Internal Revenue (SBIR)

Section 87 of PITA provides for the setting up of a board of internal revenue for each state whose operational arm is to be known as the State Internal Revenue Service (SIRS). Composition – the board of internal revenue for each state and the FCT, Abuja consists of:

  1. the chief executive of the state internal revenue service as chairman; 
  2. directors and heads of department within SIRS; 
  3. a director from the state ministry of finance; 
  4. the legal adviser to the SIRS 
  5. three other persons nominated by the commissioner for finance on their personal merit; and 
  6.  a secretary (an ex-officio member) who shall be an employee of the SIRS. 

Any five members of the state board of internal revenue, of whom one shall be the chairman or a director, shall constitute a quorum.

Functions of the SBIR

The state board of internal revenue has the following responsibilities.

  1.  Ensure the effectiveness and optimum collection of all taxes and levies due to the government, under the relevant laws; 
  2. Undertake such things as may be deemed necessary and expedient for the assessment and collection of taxes and shall account for all monies so collected in a manner to be prescribed by the commissioner of finance; 
  3.  Make recommendations, where appropriate, to the Joint Tax Board on tax policy, tax reforms, tax registration, tax treaties and exemptions as may be required from time to time; 
  4. Control the management of the SIRS on matters of policy, subject to the provisions of the law setting up the SIRS. 
  5. Appoint, promote, transfer and impose discipline on employees of the SIRS. 

Delegation of Functions

The SBIR may, by notice in the gazette or in writing, authorise any person to:

  1.  perform or exercise on behalf of the board, any function, duty or power conferred on the board; and 
  2.  receive any notice or other documents to be given or delivered to it or in consequence to this act or any subsidiary legislation made under it. However, the SBIR shall not delegate any power conferred on it under some specific sections of PITA (example- section 2, 6, 7, etc.) to any person. This is sequel to the abuse of tax administration experienced in some states during the military era in Nigeria. 

In order to assist the SBIR in the performance of its duties, section 89 of PITA also provides for the establishment of a sub-committee of the board, known as “the technical committee”.

The technical committee is to comprise the following officials.

  1.  The chairman of the SBIR as chairman; 
  2. The directors within SIRS; 
  3. The legal adviser to the SIRS; and 
  4. The secretary of the SBIR. The committee is expected to carry out the following functions. 

(a) Exercise the powers of co-opting additional staff from within the SIRS in the discharge of its duties;
(b) Treat all matters that require professional and technical expertise and make recommendations to the SBIR;
(c) Advise the SBIR on all its powers and duties; and
d) Attend to such other matters as may, from time to time, be referred to it by the board.

3.2.3 Local Government Revenue Committee

This committee was established by the provisions of section 90 of PITA. It states that each local government in Nigeria should have Local Government Revenue Committees (LGRCs).

Composition of LGRCs

The Committee shall consist of:

(a) the supervisory councillor for finance as chairman
(b) three local government councillors as members; and
(c) two other persons experienced in revenue matters to be nominated by the chairman of the local government- on their personal merits.

Functions of LGRCs

The Committee shall be responsible for the assessment and collection of all taxes, fines and rates under its jurisdiction and shall account for all monies so collected in a manner to be prescribed by the chairman of the local government. The revenue committee shall be autonomous of the local government treasury department and shall be responsible for the day – to – day administration of the department which forms its operational arm. 3.2.4 Joint Tax Board (JTB)
Section 86 of PITA provides for the establishment of the JTB which shall comprise the following.

  1.  The chairman of the FBIR , who should also serve as the chairman; 
  2.  One member from each SBIR, being a person experienced in income tax matters nominated either by name or office, from time to time, by the commission charged with the responsibility of matters relating to income tax in the state in question; 
  3. The secretary, who is not a member of the board, and is appointed by the Federal Civil Service Commission (FCSC) (d) The legal adviser of FIRS acts as the legal adviser to the JTB. Any seven members or their representatives shall constitute a quorum. 

Functions of JTB

The board shall:
(a) exercise the powers or duties conferred on it by the PITA and other acts;
(b) advise the federal government, on request, in respect of double taxation arrangement with any other country;
(c) advise the federal government on request, in respect of rates of capital allowances and other taxation matters having effect throughout Nigeria in respect of any proposed amendment to PITA;
(d) promote uniformity both in the application of PITA and in the incidence of tax on individuals throughout Nigeria; and
(e) impose its decisions on matters of procedure and interpretation of  PITA on any state for purposes of conforming to agreed procedures or interpretations.

3.2.5 Joint State Revenue Committee (JSRC)

Section 92 of PITA establishes the JSRC for each state of the federation. Composition The JSRC comprises the following.

  1. the chairman of the SIRS as the chairman; 
  2.  the chairman of each of the LGRC; 
  3.  a representative of the Bureau for Local Government Affairs, not below the rank of a director; 
  4. a representative of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), as an observer. 
  5. The state sector commander of the Federal Road Safety Commission (FRSC), as an observer; 
  6.  The legal adviser of the SIRS; 
  7.  The secretary of the committee who shall be a staff of the SIRS. Functions of JSRC 


The discussion of tax administration in Nigeria is very vital to you as a future accountant. Therefore, it is very essential for you to keep what you have learned to heart and apply it to your studies in taxation and even beyond. 


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