X-RAY OF THE LAW ON CORPORATE TAXATION AND INVESTMENT PROMOTION IN NIGERIA

Abstract

The Companies Income Tax Act (CITA) is the principal legislation that governs the taxation of corporations and all other corporate entities in Nigeria. About N12.374 Trillion Naira was generated by the Federal Inland Revenue Service in 2023 which is the highest so far in the history of our country’s tax collection. Consequently, government needs to promote investment and advertise for the available investment opportunities in the country. However, there are many factors that are considered by prospective investors before deciding on where to invest their capitals. This work focuses on ascertaining the efficacy of as well as the imperfection in the present corporate tax law in the promotion of investment in Nigeria. Doctrinal method of data collection is adopted. Statutes, books, journal articles and many other documents are used. Constant increase in the number of companies and the amount of investment in the country shows a positive impact of the law on investment promotion in Nigeria. However, the law is not absolutely perfect. It is plagued by several problems that have negative impact on the promotion of investment in the country. These inter alia include the rate of corporate tax, multiple taxation and non-compliance with the corporate tax law. Others are penalties for violation of the law perpetrated by some dubious companies and mismanagement of fund generated from taxation. To enhance the effectiveness of the law in stimulating more investments domestically and attract more FDIs it is recommended that the rate should be reduced.