TAX REFORMS ACT AND THE NIGERIAN ECONOMIC DEVELOPMENT
This study examines tax reforms and the Nigeria economic development. Its main objective is to examine the tax reforms and the economic development of Nigeria. The primary source of data collection was used in gathering data from respondents. A structured questionnaire was designed by the researcher and validity by two experts from the statistics department was used to obtain data. Chi-square (X2) was used to test the hypotheses formulated. It was discovered that tax and rate form one of the important source of revenue to Nigeria government, but tax payers react negatively to the payment of taxes. The study concludes that taxes and rate are very useful to finance social and economical project in Nigeria and it was recommended among others that government should try as much as possible to make the citizen aware and understand how state money is spent to encourage tax payers pay their taxes.
1.1 Background to the Study
This project work is to enable us to understand the tax reform and Nigerian economy development.
Early life in Nigeria did not see much of taxation. The economy was mostly self contained the lives of the people conducted by mere exchange of goods and services the people were living in a restricted geographical area, all land belonged to the state and the public service are provided by the state. The king would send round his tax collector to collect direct from the public services. The town criers were used and failure to comply will face the penalties from the king.
As the economy developed and become more complicated, and as the society become more complex, the role of taxation has become much more important and the imposition of tax become an instrument of economy development and social change. It is a key factor in shaping the fiscal policy, monetary and the investment policies of the government.
Every government has to determine what type of taxes is mostly suited for the country and to what extent each person should be taxed. The choice of tax and the rate of tax depend on the long-term objective of the government. It depends on whether a government wants to affect a re-distribution of wealth it intends to allow a completely free enterprise with no other Social Consideration.
In another way round, taxation is an essential element in speeding the pace of development through f saving and investment equitable distribution of income yet many fiscal system tend to have the opposite effect through overt and covert distribution against favour of capital. The increase or decrease in the routes of income tax can have deflationary or inflationary effects since such increased or decreased affect the amount of money available to the private sector of the economy.
1.2 Statement of Problem
Taxes had been seen as one of the major source of government revenue of any nation. Though, there are a lot of problem faced in collecting taxes, some of the problem are as follows.
Individual and private companies usually declare false profit or income so as to prevent correct assessment by the tax official by this; they know that the official will only levy taxes on the amount of income directed. Another problem is the corruption on the part of tax collector. Not only that the tax payers are under assessed but the tax officials do this for their selfish ends.