IMPACT OF FEDERAL GOVERNMENT TAX POLICIES ON NIGERIAN ECONOMY
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IMPACT OF FEDERAL GOVERNMENT TAX POLICIES ON NIGERIAN ECONOMY
THE IMPACT OF Federal Government Tax POLICIES ON THE NIGERIAN ECONOMY
The goal of writing this research paper. The influence of federal government tax policies on the Nigerian economy is used to examine whether federal government tax policies in Nigeria have contributed significantly to overall economic growth. It also tries to investigate the extent to which federal government tax policies have aided in revenue creation and allocation.
The literature research provided a history and in-depth look of the country, as well as the different regulations that govern it.
The choice on this work was based on the results of the test. The chi-square statistic was employed to test the hypothesis, and frequency tables and percentages were utilised to analyse the data.
The decisions were made with the understanding that the federal government’s tax policies serve as a regulatory framework for revenue generation in Nigeria. The argument is that the federal government’s tax policies have helped to economic growth.
Based on the preceding decision, several results were made, necessitating recommendations and, eventually, conclusions.
INTRODUCTION TO CHAPTER ONE
1.1 STATEMENT OF THE PROBLEM AND THE PURPOSE OF THE STUDY
The burden of taxation is borne primarily by individuals with the lowest income (odoh, 1998). It becomes difficult to keep an accurate record of business transactions and income taxes. Some tax collectors and assessors are deceitful.
There have been examples of bribery and corruption, as well as tax collectors being punished for misappropriating cash received from taxpayers.
Tax collectors sometimes travelled into remote settlements to collect taxes, but transportation issues sometimes complicate matters. There is also a long-standing obstacle to tax collection in order to raise funds. Taxes are imposed to generate income for the government so that it can meet the needs of the people.
The government must raise funds to provide basic services such as maintaining law and order, building roads and railways, and providing health care, social services, and educational facilities.
It is significant because it is used to accelerate recovery from trade depressions when unemployment is typically high, therefore taxation may be increased to combat these ills.
OBJECTIVE OF THE STUDY
The Nigerian government has recognised the need for revenue creation through taxation of citizens, hence there are several goals for taxation in the country.
To what extent have federal government tax policies aided revenue production and allocation in Nigeria?
To determine the extent to which the federal government’s tax policies have contributed to economic growth.
2.1 THE PURPOSE OF THE STUDY
Taxation accounts for a major amount of the federal government’s revenue. The revenue generated by taxes assisted the federal government in providing for national defence, security, justice,
transportation, communication and construction, health and education, while transfers from the fourth group and include employed retirement benefits such as pensions, gratuities, and public debt charges.
When there is inflation in the economy, the government can tax away the income in the hands of people, so diminishing aggregate demand, which would eventually bring the price down in the economy.
The government may also collect taxes to discourage the consumption of things regarded undesirable, products for welfare, or goods that allow for ostentation, incorrect investment priorities, or class distinction in society (odoh 1998).
1.2 THE SIGNIFICANCE OF THE STUDY
This study’s findings will assist both the government and the community. The government derives a substantial portion of its revenue from taxes, which it uses to meet people’s needs, such as national defence, security, justice, road and railway construction, and the provision of critical utilities, health, social, and educational facilities.
As a result, it benefits both parties because taxes are imposed to generate cash for the government in order for it to satisfy the people in a community. It is also employed to encourage economic recovery after a trade downturn, when unemployment is typically significant.
1.3 INTRODUCTORY INFORMATION ABOUT THE STUDY:
In Nigeria, numerous units of government, known as junsdictions in geopolitical parlance, carry out budgetary functions.
Some fiscal functions are more centralised, while others are more decentralised. Each level of government has economic reasons to perform each of the three major fiscal responsibilities, which are allocation, distribution, and stabilisation. The most important source of public revenue is taxation.
A tax is a levy imposed by the government on the income of a citizen of a state for which the government provides no direct advantages to the payer. It is a mandatory contribution imposed by the government on private individuals, organisations, and institutions in the country.
A person who refuses to pay a tax is subject to penalties because it is a corporation payment. However, it is only paid by those who are subject to funsdiction. (Odoh, 1998).
The federal government derived a substantial percentage of its revenue from taxation, which is a mandatory payment from corporations and natural persons to the government to meet the expenses paid in the common interest of everyone, with reference to exceptional benefits provided.
It is non-panel but mandatory transfers of resources from the private to the public sectors that must be imposed on the basis of well-established principles of equity, clarity, and convenience.
Apart from generating revenue to fund her initiative, the federal government employs taxation to influence economic activities, so achieving its growth and stabilisation aims. (odoh, 1998)
DEFINITION OF TERMS
Tax: A tax is a levy imposed by the government on the income, production, and consumption of commodities by citizens of a state for which the government receives no direct benefit.
INFLATION: This is a general increase in the price of products and services by the final consumer since it is included in the price paid.
VAT is a spending tax that is borne by the final consumer of goods and services since it is incorporated into the price paid.
FISCAL POLICY: Fiscal policy refers to how the federal government manages the flow of money in the economy.
REVENUE – Revenue is the government’s income or receipt of money. It may be claimed that the government found or obtained finance.
TAX BASE: The tax base refers to the items on which the government collects a tax.
TAX AVOIDANCE: A method by which a taxpayer illegally cuts, postpones, or avoids paying taxes. The legal court will punish you for this.
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