TAX AS A STIMULUS FOR GROWTH AND DEVELOPMENT IN NIGERIA


TAX AS A STIMULUS FOR GROWTH AND DEVELOPMENT IN NIGERIA

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  • Pages: 70
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  • Chapters: 1-5
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CHAPTER ONE

INTRODUCTION

Responsible governments all over the world, be it at the Federal, State or Local government level, are concerned with the provision of social goods and services for their citizens.

They are responsible for the maintenance of laws and orders within their nations and also for the protection of their territorial integrity against any external aggression.

In carrying out these social responsibilities, a huge amount of money is needed. One of the major sources of fund available to government to execute its numerous programs is imposition of taxes.

Governments at various levels enact laws to impose taxes and to enforce their payment so that enough revenue can be generated to defray their expenditure.

However, despite many stringent penalties and fines in the tax laws, it appears that a lot of individuals and corporate entities still do not see the reason why they should pay correct taxes or pay taxes at all. Hence, they try in some cases to avoid payment of taxes and in

other extreme cases, evade taxes (Bukar, 2004; Omoigui, 2004).

In the light of the above, it is necessary to examine the Nigerian Tax System vis-à-vis the use that the revenues generated from taxes in Nigeria are being put.

The paper is divided into six major parts, namely: the introduction (as given above); conceptual framework; specific uses of tax as a stimulus for growth and development; analysis of data; criticisms of government’s handling of tax revenue; summary, conclusions and recommendations.

Abstract
This research work is an empirical analysis of
Taxation and economic growth in Nigeria, covering the period 1994-2012.
Taxation was disaggregated into:Value Added Tax, Personal Income Tax, Company
Income Tax and Petroleum Profit Tax, while the Gross Domestic Product was used as a parameter for  measuring economic growth in Nigeria. In order to establish causality between Taxation and economic growth in Nigeria, secondary data were collected from the Central Bank of Nigeria Statistical Bulletin and the Federal Inland Revenue Services Bulletin. The data collected were analyzed using the Granger Causality Approach.
The hypothesis one was tested using F-Ratio, while hypotheses two, three, four and five were tested using T-Statistics. The results of the analysis reveal that a significant positive relationship exists
between Taxation and economic growth in Nigeria. The researchers recommend that government should encourage entrepreneurial development in Nigeria, asthis would increase government revenue from tax and reduce the rate of unemployment in Nigeria

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