A CRITICAL ANALYSIS OF THE BEST OF JUDGMENT ASSESSMENT BY RELEVANT TAX AUTHORITIES IN NIGERIA

ABSTRACT The concept of Best of Judgment Assessment in Nigerian taxation has long been a crucial tool for tax authorities in cases where taxpayers fail to provide complete or accurate financial records. This thesis offers a comprehensive examination of the historical development, legal framework, practical application, and implications of best of judgment assessment in the Nigerian tax system. The research attempts the historical context of tracing its evolution from the early stages of Nigerian taxation to the present day. It explores the factors that led to the incorporation of best of judgment assessment into Nigerian tax laws and regulations, shedding light on the challenges that tax authorities have faced in ensuring tax compliance in the absence of accurate information. Furthermore, the study provides an in-depth analysis of the legal foundation of best of judgment assessment, primarily within the Personal Income Tax Act (PITA) and the Company Income Tax Act (CITA). It examines the statutory provisions, notice requirements, and dispute resolution mechanisms associated with best of judgment in Nigeria. The practical application of best of judgment assessment is a central focus of this research. The thesis investigates how tax authorities exercise their discretion to make assessments based on the best available information and reasonable estimations when taxpayers are uncooperative or non-compliant. Case studies and examples are used to illustrate the real-world implications of best of judgment on taxpayers and the tax collection process. Additionally, the study highlights the potential consequences of best of judgment assessment including penalties and interest charges, and explores how these aspects impact taxpayer behavior and government revenue. By providing a thorough analysis of Best of Judgment Assessment in the Nigerian tax system, this thesis aims to contribute to a deeper understanding of this critical component of taxation. It offers insights that can inform policymakers, tax professionals, and taxpayers, ultimately contributing to more effective tax administration and compliance in Nigeria.