ASSESSMENT OF PETROLEUM PROFIT TAX UNDER THE NIGERIAN TAX LAWS

ABSTRACT

Petroleum Profit Tax Act provides that:

Assessment of tax shall be made in such form and in such manner as the Board shall authorize…1

But neither the Petroleum Profit Tax Act nor any other tax law in Nigeria made any provision for the definition of the term “tax” or the phrase “assessment of tax” or “the assessment of petroleum profit

tax”.

In an Australian case of Mathews v. Chicory Marketing Board2,

a tax has been defined as “a compulsory exaction of money by a public authority for public purposes, or taxation is raising money for the purpose of government by means of contributions from individual persons.”3 In addition, Mr. Justice Roberts, in an American case of United State v. Butler4, defined tax as follows:

1 Section 37(1) Petroleum Profit Tax Act {PPTA}, Cap. P13\, Laws of the Federation of Nigeria [LFN], 2004.

2 [1938] 60 C.L.R.263.

3 Ayua, I.A. Nigerian Tax Laws. Spectrum Law Publishing, Ibadan, 1st edition (1996) p.3.

4 2279U.S 1 [1946] 61.

A tax in general understanding of the term and as used in constitution, signifies an exaction for the support of government.”5

Accordingly, tax is not an optional payment or voluntary donation to the government. It is rather, a kind of an enforced contribution exacted in accordance with the legislative authority. Therefore tax, in modern period takes the forms of pecuniary burden laid upon individuals or property to support government. It is normally imposed by statute.

The term “assessment” and the phrase “assessment of tax” as well, have also no statutory definition as mentioned earlier.