Capital Allowance: Legal Framework for Efficient Administration under the Companies Income Tax Act


There are challenges in the administration of capital allowances in company income taxation which include: language of the tax statute; lack of professionals in tax administration; lack of good record keeping; capacity and poor working conditions; tax evasion and avoidance. This paper highlights how a number of companies manipulate the several provisions of the law. Some companies write off so much in order to declare loss, while they evaluate obsolete stocks worth nothing to reduce the amount of their incomes available for inefficiencies. This creates a deficient tax system with lower revenue being generated. The paper recommends that the system of capital allowance in respect of companies should be designed to stimulate economic development in the country and for this reason generous allowances should be given to industrial building, structures, mining and agriculture, in other to increase investment and production.

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UNILAG Law Review, (2018) Volume 2 Edition 1

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