This study, TAXATION AS A MAJOR SOURCE OF FUNDING TO THE GOVERNMENT contains concise information that will serve as a framework or guide for your project work. The project study is well-researched for academic purposes and are usually provided in complete chapters with adequate References.
1.1 BACKGROUND TO THE STUDY
1.2 STATEMENT OF RESEARCH PROBLEM
1.3 RESEACH QUESTIONS
1.4 OBJECTIVE OF THE STUDY
1.5 SCOPE OF THE STUDY
1.6 SIGNIFICANCE OF THE STUDY
1.7 LIMITATION OF THE STUDY
1.8 CLARIFICATION OF KEY CONCEPTS
2.1 CONCEPTUAL LITERATURE
3.0 RESEARCH METHODOLOGY
SUMMARY, CONCLUSION, AND RECOMMENDATION
A tax is a compulsory, unrequited payment to general government (OECD, 1996).
Also, tax is a compulsory levy made by public authorities for which nothing is received directly in return. (James and Forbes, 1997).
There are inconsistencies in the Nigerian tax laws due to economic variance;which had made it difficult for the tax body to administer and even for the tax payer to follow.Though the federal government had the intension to maintain a uniform tax system, the economycondition of each state has given room for diverse system. The impact of tax payment is notseen by payee and some of them do not understand the tax laws which has put them into doubtand confusion and has absolutely made others to want to avoid and evade tax.Every modern state or nation requires a lot of revenue to be able to provide and maintainessential services for its citizen. One ready means of revenue for the government is through theimposition of tax. There ishardly any government today that does not rely on taxation. However, apart from thecomplications that have crept into the taxation system in modern times, the reason for theimposition of tax in fact ceased to be only for the generation of revenue for the state. It has alsobecome the avenue for the redistribution of wealth and re-adjustment of the economy (Ojo,2008).
Therefore, the tax system is one of the most powerful levies available to any government tostimulate and guide its economic and social development. The FBIR (Federal Board of InlandRevenue) which is vested with the power to administer the act and carry out all the act whichmay be deemed necessary and expedient for the assessment and collection of tax ,and shall forall amount so collected in a manner to be prescribed by the Federal Minister of Finance. TheBoard has certain reserved power which shall not be delegated to other person to perform, e.g.power to acquire, hold and dispose properties of any company in satisfaction to tax or anyjudgment debt, and to specify the forms of return claim and notices.The main forms of tax collected are direct and indirect taxes. For the direct taxes, it is levied onindividuals, and factors of productions e.g. Personal Income Tax (PIT), Capital Gain Tax (CGT).However, indirect taxes are levied on goods and services e.g. import and export duties. Thus, theconsumers bear the ultimate burden.Having realized that taxation is one of the most important sources of revenue for the varioustiers of the government and a major way of sourcing financial support to the Nigeria governmentat large, it is of paramount importance that tax evasion and avoidance is discouraged with everyconceivable means. The purpose of this study therefore is to investigate the impact of taxrevenue on Nigeria economy; the effect of tax evasion on Nigeria economy; the relationshipbetween tax policies and social development, and the effect of incompetent tax officials onNigeria economy. Tax revenue mobilization as a source for financing development activities in Nigeria has been adifficult issue primarily because of various forms of resistance, such as evasion, avoidance andother form of corrupt practices. These activities are considered as sabotaging the economy andare readily presented as part of the reasons for present state of underdevelopment in Nigeria.Government exists in order to effectively collect taxes from available economic resources andmake use of same to create economic prosperity such that available and willing human and otherresources are gainfully employed, infrastructures provided, essential public services (such as themaintenance of law and order) put in place among others. Tax resistance only makes theselaudable programmes unattainable. Following some reasoning, changing or fine-tuning tax ratesis used to influence or achieve macroeconomic stability. Some of the most recently citedexamples are the governments of Canada, United States, Netherland, United Kingdom, whoderive substantial revenue from Company Income tax, Value Added Tax, Import Duties andhave used same to create prosperity (Oluba 2008).
According to Bariyiman and Gladson (2009), tax administration in Nigeria is carried out by the various tax authorities as established under the relevant tax laws. “Tax authority” as defined in section 100 of the Personal Income Tax Decree, 1993 and amended by Decree No 18-finance Miscellaneous Taxation Provisions) Decree 1998, means “the Federal Board of Inland Revenue, the State Board of Internal Revenue or the Local Government Revenue Committee”. The tax authority as defined in addition to the Joint Tax Board, the Joint State Revenue Committee and the Body of Appeal commissioners together constitute the organs of tax administration in Nigeria.
Ariyo (1997) in his study on productivity of the Nigerian tax system and reports a satisfactory level of productivity of the tax system before the oil boom. The advent of the oil boom encouraged some laxity in the management of non-oil revenue sources like the company income tax, which was rectified to a reasonable extent with the commencement of the structural adjustment programme. The report underscores the urgent need for the improvement of the tax information system to enhance the evaluation of the performance of the Nigerian tax system and facilitate adequate macroeconomic planning and implementation.
Sani (2005), the Executive Governor of Zamfara State stated that tax system as a whole is anembodiment of contention and controversy whether in its policy and formulation, legislation or administration.
Each state in Nigeria has its own source of funding to its Government. But some states generate more funds then others through taxation.
The growth and development of a state or country depends on how it can generate fund for itself. There are various ways of generating funds for the government. It can either be through sales and services both internally and internationally or by its citizens paying tax directly or indirectly.
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