The effects of corporate tax on the profitability of business organization

Thesis Overview

<p> </p><div><p>3.0 &nbsp; &nbsp; <strong>INTRODUCTION</strong></p><p>This topic “effect of corporate tax on the profitability of business organizations” reveals both the positive and negative ways in which tax payment has affected the profit structure of business organizations.</p><p>Meanwhile, it will do us good to briefly discuss the origin of corporate taxation in Nigeria. &nbsp;The universality of taxation account for its description as a popular way of raising revenue by Turner and Hunt (Okoye 1998:7). &nbsp;In that light, Benjamin Franklin is quoted to have argued that in this world, nothing certain but death and taxes. In Nigeria in context, income tax was first introduced in Nigeria in 1904 by Lord Luggard who enacted the first income tax statute when he was the high Commissioner for Northern Nigeria. &nbsp;The colonial government in Nigeria like in all other colonized government in Nigeria introduced various taxes in Nigeria in order to tap the financial resources for their operations from the people. &nbsp;In that situation, government taxation want an extension of the network of exploitation of the colonized people.</p><p>The post colonial states unavoidably inherited and sustained taxation as one of the government sources of revenue. &nbsp;The first tax on companies was known as the profit tax. &nbsp;This important step involves the taxation of companies at different rate from individuals and union corporate business was followed during the second world war by the introduction of a system of capital.</p><p>The corporate tax as we know was introduction in 1965 in Britain. &nbsp;The recent development of this tax is attributed to the fact that until well after the second world war, the corporate form of business was practically non-existing in Nigeria. &nbsp;Being recent it has therefore not received as much as attention from the populace as personal income tax has.</p><p>However, with the growth of the economy, the corporate sectors has expanded considerably, bringing more sharply into focus the problem of taxing corporate income, and at exploiting a potentially source of revenue.</p><p>Over one thousand (1000) companies were subjected to company’s income tax. &nbsp;In 1963, compared with only about three hundred and fifty (350) in 1960. &nbsp;Now, comparing these figures with the great number of corporate now in existence, presently, we have about three thousand companies, which</p></div><h3></h3><br> <br><p></p>