CHAPTER ONE
INTRODUCTION
Nigeria as a nation has the vision of becoming one among the world’s 20 largest economies in the year 2020; this obviously is the brain behind the priority attention the present administration is directing at infrastructural development which is essential for economic growth. A developed economy is one with the ingredient to stimulate investment and create wealth, this by implication offers an atmosphere that is business friendly and has the potentials for the actualization of the vision 2020.The desired outcome requires a lot of money to put the economy in a position that stimulates investment, therefore, tax policies need to attract potential investors, and the revenue from tax should be sufficient enough to meet the infrastructural expenditures of the government. Apere (2003) notes that taxation is a microeconomic and fiscal policy instrument; it involves the transfer of resources from the private to the public sector for the accomplishment of economic and social goals. It is an instrument the government uses to measure, access and control the informal sector that dominate developing economies of the world (Wambaiand Hanga, 2013). Economic development is the first priority of every developing nation, Nigeria being a developing nation is no exception. The concept of economic development is closely related to economic growth, these two concepts are more often than not used interchangeably. Even among the economist, consensus had not yet been reached as to the difference between the two concepts. While one school of thought sees the two as the same, the other school of thought differentiates economic development from increase in Gross National Product. The two concepts however, shall be used interchangeably for the purpose of this study. Mc Graw Hill Dictionary of Economic defines economic growth as “an increase in nations or areas capacity to produce goods and services coupled with an increase in production of these goods and services. To provide goods and services, however the government needs to purchase goods and services from the private sector and to employ labour. Given the comparatively limited amounts of resources that it is ordinarily possible and product to obtain from abroad and from domestic borrowing and non-tax revenue, most of the developing countries have felt the need to increase tax revenues. One of the major functions of any government especially developing countries such as Nigeria in the provision of infrastructure service such as electricity, pipe-born water, Hospitals, schools, Access roads and as well ensure a rise in per capital income poverty alleviation to mention a few. For these services to be adequately provided government should have enough revenue to finance them. The task of financing there enough revenue to financing there enormous responsibilities is one of the major problem facing the government. Given the limited resources of government, there is need to carry the citizens (governed) along hence the imposition of tax on all taxable individuals and companies to augment government’s financial position. To this end, government have always enacted various tax laws and reforms existing ones to stand the taste of time. They include: income tax management act (ITMA) companies income tax decree (CITD) joint tax board (JB) etc. All these are aimed at ensuring adherence to Tax payment and discouraging tax evasion and avoidance. For the purpose of this study, the researcher would be concerned with the effect of taxation as an instrument to national economic development of Edo state (Nigeria).
1.2 STATEMENT OF THE PROBLEM
The first need of any modern government is to generate enough revenue which is indeed the breath of its nostril” Thus taxation is by far the most significant source of revenue for the government. The ideas Nigeria’s regard payment of tax as a means whereby government raises revenue on herself at the expense of their sweat. It is good to note that no tax can succeed without the tax payer’s co-operation. Here, we can ask some thought-provoking question such as what takes taxation such a difficult issue. Why do people feel cheated when it comes to tax? Is government making judicious use of tax payer’s money? In view of these questions above this study is going to be carried out to offer solution to them. We shall also look at the following issues and offer recommendations.
1.3 OBJECTIVE OF THE STUDY
The general objective of the study is to assess the contribution of taxes towards the growth of the Edo state economy.
Hypothesis 1
HO: Taxation as a tool does not aid economic development in Nigeria
H1: Taxation as a tool aids economic development in Nigeria
Hypothesis 2
HO: There is no significant relationship between taxation and economic development in Nigeria
H1: There is a significant relationship between taxation and economic development in Nigeria
The study will afford us the opportunity to know the roles taxation play in the Edo state economy’s such roles includes:
1.7 DEFINITION OF TERMS
Tax: A compulsory levy by the government on its citizen for the provision of public goods and services.
Tax Base: The object which is taxed for instance personal income, company profit.
Tax Rate: The rate at which tax is charged.
Tax Incidence: It offers to the effect of and where the burden is finally rested.
FBIRS: Federal Board of Inland Revenue Services. It is an operational arm of Federal Board of Inland Revenue which is responsible for the Federal Tax matters.
CITA: Company Income Tax Act (CITA) is a federal law operated by the FIRS, which deals with the taxation of all limited liability companies in Nigeria with the exception of those engaged in petroleum operations.
JTB: Joint Tax Board (JTB) is established under Section 85(1) of Decree 104 of 1993 to arbitrate on tax disputes between one state tax authority and another.
VAT: Value Added Tax is a multistage tax levied and collected on transactions at all stages of sales and distribution.
CGTA: Capital Gain Tax Act is an act that stipulates that all capital gains arising on disposal of asset of individual partnership and limited companies should be taxed.
PPTA: Petroleum Profit Tax Act is an act that regulates the petroleum profit tax and also specifies how profit from petroleum will be taxed.
Withholding Tax: This is tax charged on investment income namely: rents, interest, royalties and dividends, presently it is charged as the tax offset.
Progressive Tax: This is a tax incidence that increases as the size of income increases.
Regressive Tax: A tax is regressive when its tax rate decreases as the income increases.
Excise Duties: These are taxes on some goods manufactured within a country.
Persons: It includes all taxable persons whether it is individual or corporate bodies.
Accounting/ Audit/ Finance Jobs
Administration/ Office/ Operations Jobs
Advertising/ Social Media Jobs
Copyright © 2024 All Right Reserved CVClue
A Subsidiary of EMINENT INFO TECH VENTURES