CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In a natural resources blessed country like Nigeria also with the operation of indigenous and foreign companies, the problem of underdevelopment should not be the topic of the day. Thus the emphasis on taxation by one and all cannot be over emphasized though is just one of the avenue open to the government to generate revenue. Taxation according the Nightingale (1997) is a compulsory contribution imposed by the government on its citizens. Our guest to ensure economic growth shall meet with desired expectation if all expected tax is paid and as at when due. From the forgoing, we can now deduce the need to garnish our understanding with contemporary knowledge in the area of taxation, economic growth so as turn around the fortune of our governments. Taxes are levied on individuals, groups, business or corporate organization, by constituted authority for funds used by state in the maintenance of peace, security, economic growth and social engineering among others for the benefits of the citizenry. In this view, the management of a society for effective growth rest on the government who can only discharge such responsibilities creditably to the citizenry with adequate resources. Therefore, it behaves a responsible citizenry to discharge his/her duties to the state through prompt and regular payment of taxes. The economic history of both developed and developing countries reveal that taxation is an important weapon in the hands of the government; not only to generate revenue, but also to achieve goals such as influencing the direction of investment and taming the consumption of certain foods and services. As hold by Hyman (1992) a tax is simply a compulsory payment levied on the citizens by government for the purpose of the government itself. Traditionally, taxes are based on income of individuals or profit of an economic entity. Other bases of taxes are wealth, capital, property and consumption. All forms of consumption taxes falls within the preview of indirect taxation, income taxes and those based on capital and wealth are in the realm of direct taxation.