CHAPTER ONE GENERAL INTRODUCTION
Background To The Study
In any given economy, the issue of taxation is of tremendous importance because it serves as revenue generation forum to the government hence; its role cannot be in doubt. Taxation can also be employed as an instrument of economic policy formulation and implementation including a means of wealth redistribution in the economy.
Small and Medium Business Enterprises (SMBE) are newly introduced tax policy for revenue generation income and redistribution. Thus, taxes are a source of revenue to the government. In its first month of operation SMBE in this country yielded revenue of N5.4 billion to the government. Apart from petroleum tax, it is obvious that no other form of taxation either direct or indirect equal the revenue yield of SMBE.1
Consequently, the idea of SMBE tax was introduced in furtherance of tax reforms. The Federal Government set up in 1991 a study group to review the country‘s indirect tax system.2 The study group among other things recommended the administration of SMBE tax in Nigeria and the government accepted the recommendation and therefore, set up a SMBE committee which carried out a feasibility study on SMBE and came up with a report submitted to the Federal Government with a recommendation to introduce SMBE tax in the country in January 1993.3
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