THE IMPACT OF TAXATION ON ECONOMIC GROWTH IN NIGERIA (1986-2011). A RESEARCH PROJECT MATERIAL ON ECONOMICS
ABSTRACT
The research work will discuss in detail the impact of taxation on Economic growth in Nigeria. It will also take cognizance of the aims and objectives of taxation and its impact on the economic growth of Nigeria. It also aimed at identifying problems that inhibit the efficient and effective administration of the Nigeria tax’s system. In evaluating this, the researcher adopted econometrics by applying Ordinary Least Square (OLS) techniques. It was found out that interest rate has no significant effects on taxation in Nigeria economy for the said period. Hence, the researcher concludes that interest variation has not really effected investment growth in Nigeria. I recommended that the government should put more emphasize on the aspects of taxation since the main source of development.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The political, economic and social development of any country depends on the amount of revenue generated for the provision of infrastructure in that given country. However, one means of generating the amount of revenue for providing the needed infrastructure is through a well structured tax system. According to Azubike (2009), tax is a major player in every society of the world. The taxation is an opportunity for government to collect additional revenue needed in discharging its pressing obligations. A taxation offers itself as one of the most effective means of mobilizing a nation’s internal resources and it lends itself to creating an environment conducive to the promotion of economic growth. Nzotta (2007) argues that taxes constitute key sources of revenue to the federation account shared by the federal, state and local governments. This is why Odusola (2006) stated that in Nigeria, the government’s fiscal power is divided into three-tiered tax structure between the federal, state and local governments, each of which has different tax jurisdictions. The system is lopsided and dominated by oil revenue. He further argues that over the past two decades oil revenue has accounted for at least 70% of the revenue, thus indicating that traditional tax revenue has never assumed a strong role in the country’s management of fiscal policy. Instead of transforming the existing revenue base, fiscal management has merely transited from one primary product-based revenue to another, making the economy susceptible to fluctuations of the international market.
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