CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Taxes are considered a problem by everyone. Not surprisingly, taxation problems date back to earliest recorded history. The basic principles of taxation are nearly as old as human society—the history of taxes stretches thousands of years into the past. The earliest trace of taxation in Nigeria was believed to have started from Northern part of Nigeria and this was before the advent of British administration. The emirs had organized forms of administration and their Islamic relation made it possible for people to contribute towards charity which laid a solid foundation for direct taxation in Northern Nigeria. Prior in 1900, some of the levies were “Zakkat (a tax on moral property meant for charity),Jangali (tax on livestock),Gado (death tax),Jizjah (tax on slaves) etc these were recognized in the Northern Nigeria, (Onwubiko,1998).
There were also some form of taxes in Southern Nigeria (Yoruba parts) by way of tributes (isakole), levies, fees and presents given to Obas (Kings), Chief in Benin, Oyo and some other Yoruba Kingdom of Western Nigeria. However in the east this type of tax paying tradition was virtually non-existing but except fine called “Iri-iwu”due, mainly to lack of organised central authority.In which the eastern Nigerians are known for their Egalitarian society. These forms of taxation come to a halt with the advent of colonial master’s. The Oba’s and emirs where now used in imposing taxation on their subjects and anyone found guilty was punished, (Onwubiko,1998).
Taxation in modern times is said to be an economic development tool that provides the financial base for providing public goods. It is a double-edged sword depending on what is the interest of the government in power. Also it is a compulsory payment by individuals and organizations to the relevant inland or internal revenue authorities at Federal, State, or Local Government levels. Taxes perform fiscal or budgetary functions, economic function and social or redistribute functions. The hospitality industry which is a broad industry covering various hosting services including restaurants, hotels, bars, cruise lines and many other related businesses. Globally it is a multi-billion dollar industry with broad offerings, in Nigeria the best of hospitality development is found in accommodations and restaurants. The hospitality market is booming in Nigeria and with that boom comes new found diversification in a new range of quality and classifications yet there is much more room for growth, diversification and standardization, (Oruruo,2014).
In Nigeria, the Corporate Income tax rate is a tax collected from companies. This amount is based on the net income companies obtain while exercising their business activity, normally during one business year. Revenues from the Corporate Tax Rate are an important source of income for the government of Nigeria It is also an assessment levied by a government on the profits of a company. Hereby causing extra reduction in the possible net profit of the company after normal company expenses have being deducted before attaining the net profit it is the further reduction in the net profit which is usually 30% of the net profit assessed on a preceding year basis.