EFFECT OF TAXATION ON MANUFACTURING FIRMS
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EFFECT OF TAXATION ON MANUFACTURING FIRMS
ABSTRACT
Taxation can be thought of as an assessment levied by the government to fulfil the goals of government systems.
The purpose of this Study is to discover how taxation affects Manufacturing enterprises, namely Ikeji Plastic Company Limited in Onitsha. The study tries to determine whether these effects are beneficial or detrimental.
The study is being conducted as a first step towards finding solutions to these difficulties. Questionnaires were utilised to direct the study in an attempt to answer the research questions.
The obtained data and stated questions were later analysed and tested using arithmetic percentages. Certain realities are revealed by the influences and education gained from these analyses and tests.
It was revealed that taxation has both good and bad effects on manufacturing enterprises. While people polled believe that the tax their company pays is excessive, they also believe that they profit from paying such taxes.
Based on the data, the researcher suggests that the government devise a method of verifying and balancing tax payments in order to avoid discouraging tax payers from paying.
INTRODUCTION TO CHAPTER ONE
1.1 STATEMENT OF THE PROBLEMS AND THE PURPOSE OF THE STUDY
It is a truth that manufacturing industries fail to accomplish their objectives as a result of their incapacity to meet their tax obligations.
The study was developed to identify the issues that taxes have caused in the manufacturing industry. The study also plans to investigate the consequences of taxation on manufacturing enterprises, particularly profit.
The impact of taxes on a company’s line of business. The study’s goal is to help manufacturing industries understand how significant taxes is. The study’s purpose is to investigate, among other things, the following;
v The impact of indirect taxes on manufacturing industries’ capacity to obtain equipment and raw supplies.
v The government’s efforts to ensure optimum production efficiency and no unhappiness on the part of the manufacturing industry with regard to taxation.
1.2 IMPORTANCE OF THE STUDY
The study’s rationale is to identify and explain how much effort the government has put in to ensure maximum efficiency in production and no unhappiness on the part of the manufacturing businesses with regard to tax.
Every government with good intentions usually focuses on how to carry out an effective fiscal policy, which is a process of controlling public spending and shaping the tax system.
v Maintaining a growing high level of employment In the case of the manufacturing sector, the nature of the effect of taxation policy will be determined by the government’s desired outcome.
It may or may not benefit the manufacturing industry. One example is when the government creates tax breaks for new industries in order to safeguard them.
1.3 SIGNIFICANCE OF THE STUDY
The purpose of this study “the effect of taxation on manufacturing firms” a case study of Ikeji Pastic Company LTD is that it serves to educate manufacturing firms about the importance of taxation in terms of economic growth as it affects manufacturing firms.
It will also focus on the performance of manufacturing industries and the economic impact they have. The study will also emphasise how to get the manufacturing industries to take necessary actions to boost their business while also providing happiness.
The study will also be useful or important to the folks listed below.
v The business community for the purpose of calculating corporate income taxes.
v Small and local manufacturing industries
v The government and those in charge of budgetary policies.
v Students and other scholars who want to expand on this research.
1.4 BACKGROUND OF THE STUDY
Taxation has existed in Nigeria for many years, even before the colonial era. Local communities are then frequently taxed to promote some of their community projects and to defend themselves against any threat. It has long been assumed that taxation has enabled civilised economies to develop.
One of the fiscal policy instruments is taxation. We have all witnessed changing administrations and governments in Nigeria, and fiscal policy appears to alter on a regular basis, producing instability in the system.
Taxation is commonly seen as a mandatory levy imposed by the government through its agencies on the income, consumption, and capital of its subjects.
Personal income, corporation profit, and os on are used to calculate these levies. It should be mentioned that taxation is critical to a country’s economic success. Its fluctuation will have an influence (whether positive or negative) on the economy.
Every government with good intentions usually focuses on how to carry out effective fiscal policies, which is a procedure to check public expenditure and shape the tax system.
v Maintaining a growing high employment rate
v Expansion of the business cycle
v Inflation reduction
v Avoiding excess demand.
Any taxation policy aimed at achieving the aforementioned aims usually has a broad impact on the economy, affecting both manufacturing and consumption. Taxes are divided into two types: direct and indirect taxes.
Direct taxes are collected directly on individuals and businesses. Personal income tax, corporate tax, and capital gains tax are all examples of direct taxes.
Indirect taxes: These are taxes on products and services, such as import and export tariffs and excise duties.
DEFINITION OF TERMS
A newly founded industry is referred to as an infant industry.
Taxation system: this is the method by which the government collects and distributes taxes.
Taxation: the forced contribution to the government’s support paid on persons, income, property, commodity transactions, and so on at defined rates, usually proportional to the amount taxed.
Manufacturing firms: an autonomously managed unit of the manufacturing industry.
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