INTRODUCTION TO TAXATION AND PUBLIC FINANCE

Question 1

Income exempted from tax include

Answer 1

• Refund of medical or dental expenses
• Cost of uniform
• Compensation for loss of office.
• Any reasonable removal or relocation expenses
• Any cost of passage to and from Nigeria in respect of expatriates
• Pension granted to a person under the provisions of the Pensions Act relating to widows and orphans.
• Retirement gratuities
• • Any dividend from a pioneer company

Question 2

Income liable to tax

Answer 2

• gains or profit from trade, business, profession or vocation;
• emolument from employment, benefits in kind and bonus,
• dividend, interest or rent; and
• any charge or annuity

Question 3

Who is an itinerant worker?

Answer 3

This is an individual who works in more than one place in Nigeria or who earns daily wages.

Question 4

What is employment income?

Answer 4

This is income earned by a person who is engaged by another under a contract of employment. Income tax is paid under the Pay-As-You-Earn (PAYE) system.

Question 5

Wagner’s Law of Increasing state Activity

Answer 5

postulates that governemnt expendture will increase over time more than national output

Question 6

Wiseman peacock hypothesis

Answer 6

This hypothesis addresses the behavior of government spending, suggesting that increases in public expenditure occur in a step-like manner rather than a smooth, continuous growth.

Question 7

Reasons for groeth of public expenditure

Answer 7

DEFENCE
PUBLIC GROWTH
URBANISATION
WELFARE STATE AS AGAINST POLICE STATE
EXPANSION OF DEVELOPMENT ACTIVITIES
SERVICING PUBLIC DEBT
POVERTY ALLEVIATION PROGRAMMES INCREASE