PERSONAL INCOME TAX IN DEVELOPMENT OF NIGERIA ECONOMY
ABSTRACT
This research presents the
results of the impact of
personal income tax. The
population for the study
consists of 100 people
which were randomly
selected, Data were gathered using a self -constructed questionnaire and the result gotten was analyzed using the
simple percentage method. The validity and reliability of instrument were ascertained. The result of the study
revealed that people hardly pay their income tax and also personal income tax affects the economic development in
Nigeria. Results showed that there is a positive relationship between the contribution of taxes and economic
development and that tax revenue has a great impact on the GDP of Nigeria. However it is recommended that Notice
of tax returns at the beginning of very financial year should be supported with handbills and poster written in local
languages such as Yoruba, Hausa, Igbo and others to also enable illiterates remained to civil responsibilities
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Tax is defined as money that has to be paid to the government by the people according to their profits on goods and
services provided. Chris and Elizabeth (2001) also defined taxes as a forced proportional contribution from persons
and property levied by the state by virtue of its sovereignty for the support of government and for all public needs.
Generally, taxation can be described as a form of levy imposed on all residents living and non-residents doing
business within a tax jurisdiction. It is a civic and patriotic responsibility of citizens to pay taxes imposed which also
come to the government as income or revenue yielding device to finance the provisions of socio-economic and
infrastructural amenities and also to enhance industrial efficiency.
The history of taxation in Nigeria dates back to the pre-colonial period. According to Lekan and Sunday (2006) before
the colonization of the different entities which were later amalgamated under the name Nigeria, there were different
systems of taxation existing in the form of compulsory services, contribution of goods, money, labour and so on
amongst the various kingdoms, groups and tribes controlled by the Obas, Emirs, Ezes, Attah of Igala, Tor of Tiv,
Ohinoyi of Ebira and so on in order to sustain the monarchs.
The various taxes levied by the different ethnic groups by the kings according to Ola (2004) took several forms such
as ‘Zakkat’ levied on Moslems for educational, charitable and religious purposes, ‘kudin-kasa’, a form of an
agricultural tax levied on utilization of land, ‘shuka-shuka’ levied on the ownership of cattle based on the member of
cattle, ‘Ishakole’- contribution of farm products as a form of land tax in exchange for the use of land for agricultural
purposes payable to Obas, chiefs and family community heads, community tax payable by all adults in order to
execute projects beneficial to the community; ‘Oko-ane’ payable to Attah Igala for hunting in a particular forest,
‘Osusu Imachi-Nkwu’ payable to Ezes in Igbo land by those who harvest palm fruits and are expected to contribute
proportion of the harvested palm oil. In Tivland in Benue state certain taxes are paid by couples during marriage
ceremonies which are used for various community development projects.
PERSONAL INCOME TAX IN DEVELOPMENT OF NIGERIA ECONOMY