TAXATION AND ITS EFFECT ON THE NIGERIAN ECONOMY (A CASE STUDY OF OWERRI MUNICIPAL COUNCIL)
ABSTRACT
The aim of this study was to investigate on taxation and its effects in the Nigeria economy. One of the objective carried out by the researcher was to examine peoples perception on taxation. Taxation is seen as a tool aimed at improving the performance of the national economy by such means as altering the balance between current consumption and capital investment. It looked at the work of other authors in order to make the exercise richer. Their different views were seen in different books and other materials (journal) which made this study much better than similar works in this area. In carrying out this study, the researcher used both primary and secondary data. Qestionnaries and interviews were used in generating the primary data while the secondary data were obtained through library researcher and other sources. The purpose sample of 147 respondents were randomly selected for the study to avoid numerous errors in the calculation. From the data collected and analysed, it was evident that tax collection plays a great role in the development of the Nigeria economy. Conclusively, discussion, summary, conclusion, and recommendations were made to achieve the purpose of this work.
TABLE OF CONTENTS
Title Page i
Statement of Authenticity ii
Abstract iii
Acknowledgement iv
Dedication v
CHAPTER ONER
1.0 Background to the Study 1
1.1 Statement of Problem 4
1.2 Research Questions 4
1.3 The Objective of the Study 5
1.4 Significance of the Study 5
1.5 Limitations/ Scope of the Study 5
CHAPTER TWO LITERATURE REVIEW
2.0 Introduction 7
2.1 Brief Historical Background 8
2.2 Purpose of Taxation 10
2.2.1. Redistribution of income and wealth 10
2.2.2 Promotion of social and economic welfare 10
2.2.3 Economic Stability 11
2.2.4. To foster growth in the key sectors of the economy 11
2.2.5 Regulation 11
2.3 Nature of Taxes 12
2.4. Classes of Tax 13
2.4.1 Direct Taxes 13
2.4.2 Direct Taxes 13
2.5 Principles of Tax 14
2.5.1 Clarity and Certainty 14
2.5.2 Convenience 14
2.5.3 Economical and Efficiency 14
2.5.4 Fairness 15
2.6 The Subject Matter of Income 15
2.6.1 Income Tax Reliefs 18
2.7 Concepts of Income Tax Evasion, Avoidance and Default 18
2.7.1 Factors that bring about tax evasion, tax avoidance and tax default 21
2.7.2 Existence of the income tax evasion 22
2.7.3 Reasons for income tax evasion 24
2.7.4 Effects of income tax evasion 25
2.7.5 Measurement of income tax evasion 27
CHAPTER THREE METHODOLOGY
3.0 Introduction 29
3.1 Study Population and Sample 29
3.2 Sampling Technique 30
3.3 Data Collection Instrument 30
3.3.1 Questionnaires 30
3.3.2 Interviews 31
3.3.3 Validity, Reliability and Analyses 31
3.3.4 Data Presentation 32
3.3.5. Problems of the Study 32
CHAPTER FOUR
RESULTS PRESENTATION AND ANALYSES
4.0 Introduction 34
4.1 Analysis of Retrieved and not Retrieved Responses from Respondents 34
4.2 Analysis and Interpretation of Data From Imo State tax Officials 36
4.3 Analysis and Interpretation of Data From Traders 40
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.0 Introduction 45
5.1 Summary of Finding of the Study 45
5.2 Conclusion 46
5.3Recommendations 47
5.4. Suggestions for Further Research 48
References 49
Appendix 50
CHAPTER ONE
1.1 BACKGROUND TO THE STUDY
The modern view of taxation stems from the common premises that no one can be an island for him or herself. This means that in the modern society, societal members are dependent on one another. This interdependence leads to communal way of living and as such certain goods and services enjoyed by the society are usually referred to as the infrastructure of the society. The provision of the infrastructure of any society calls for a colossal amount of money which, of course the individual will find difficult to provide. There is therefore the need for a common source of fund on which to draw for the provision of the needed infrastructure.
One of the means of this common source of fund is taxation. In 1996, Moses, Williams and Salter defined tax as a compulsory levy collected by the government to fund public expenditure. All over the world, taxes are being raised to provide services that private enterprise or individual citizens cannot provide or services that are better provided by the state. In view of the above, a tax is a compulsory levy on the wealth of a person or body of person for the provision of the infrastructure of the state. Taxes are now seen as compulsory extractions that involve personal obligations for common public purposes. Every government has its own development programme to pursue and one way of financing such progammes is revenue derived from taxation. But in a democratic society, this power is vested in the legislature. This however, is not the case in an authoritarian regime where the imposition of tax rests on the ruling body.
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