ABSTRACT
This research work
examine as a significant tool for economic development. It concludes that a tax
has played an important role in the economic development of a state. Tax policy
has not been effective in enhancing social development in terms of distributing
social income or encouraging social desirably activities. The relationship
between taxation and the economic development is perhaps not as obvious. A case
can be made that tax policy has had a positive impact on the development of the
state. Data for this study were collected through questionnaire on 45
respondents drawn from internal revenue service, Uyo, Akwa Ibom State. The
researcher questions were raised and the hypothesis was tested through the use of correlation analysis. The result
of the research study shows that taxations has a significant contribution on
economic development of a state and citizens are liable taxes because there is
nothing free.
TABLE OF CONTENTS
Title page - - - - - - - - - -
Certification - - - - - - - - -
Dedication - - - - - - - - - -
Acknowledgement - - - - - - - -
Table of contents - - - - - - - -
Abstract - - - - - - - - - -
CHAPTER ONE- INTRODUCTION
1.1
Introduction
of the study
1.2
Historical
background of the study
1.3
Statement
of the problems
1.4
Objectives
of the study
1.5
Research
Questions
1.6
Statement
of the hypothesis
1.7
Significance
of the study
1.8
Limitation
of the study
1.9
Scope
of the study
1.10
Definition
of terms
CHAPTER TWO- REVIEW OF RELATED LITERATURE
2.1 Introduction
2.2 The Meaning And Concept Of Taxes
2.3 Principle Of Taxation
2.4 Taxes Are Divided Into Two Broad Types
2.5 Qualities Of Good Tax System
2.6 The Effects Of Taxation
2.7 Characteristic Of Tax System On The
Economic Development
2.8 Appraisal Of Taxation
2.9 Factors Enhancing Smooth Collection And
Payment Of Tax In Nigeria
2.10 The Economic Effects Of Taxation In Nigeria
2.11 The Role Of Taxation As They Affects The
Development Of Nigeria’s Economy
CHAPTER THREE-RESEARCH
Methodology
3.1 Introduction
3.2 Area of the study
3.3 population of the study
3.4 sample sixe and sampling techniques
3.5 data collection
3.6 administration of the instrument
3.7 Method of data analysis
3.8 Decision rule
CHAPTER FOUR-DATA PRESENTATION AND ANALYSIS AND
DISCUSSION OF FINDINGS
4.1 Introduction
4.2 data presentation and analysis
4.3 testing of hypothesis
4.4 discussion of findings
CHAPTER FIVE-SUMMARY, CONCLUSION AND
RECOMMENDATION
5.1 Introduction
5.2 Summary
5.3 Conclusion
5.4 Recommendation
REFERENCES
APPENDIX
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Taxation is an important tool to meet the needs of the people of
resource producing state. It is a major national issue in most countries and is
often problematic in its imposition, administration and usages. It’s nature
contrast with its obvious benefits to society.
The introduction of taxation could be traced back to ancient days when
kings levied their subject to provide for the benefit of the people.
In Nigeria, the imposition of tax is traced right from the colonial
government when Lord Fredrick Lugard introduced tax to people in order to
generate revenue to run his administration. It is reported that his policy of taxation was not accepted by
the citizens and these subsequently led to riot in 1929.
Government, though its agent have come to play the larger role in
controlling our national economy. She has to
Consider the aspect in which taxes helps in achieving her economic
goals.
Taxation has been introduced to enable the government generate revenue
to implement certain function for the citizens of the country. This functions
of taxation in Nigeria include wealth redistribution, economic growth,
employment generation, price stability and etc.
Taxation in ancient period and
in present time has been used to bring improvement in finance of the country.
The tax collected has been used as revenue to the government.
Also, taxation has helped to discourage the consumption of certain goods
and service. It helped to bring government planning into implementation because
it generate revenue, allow for investment in certain areas, like foreign goods
and encourage agriculture and industries. Consequently, for some infant industries,
there is a period of tax holiday which could last for five years to enable such
industries or company nature
1.2
HISTORICAL BACKGROUND OF
THE STUDY
Historically, internal revenue service was a department of ministry of
Finance before the civil war in 1960. It was called as at then ”Revenue
Department”, after the civil war in 1970, the name was changed to South Eastern
State Board of Internal Revenue Service, according to South Eastern State Edict
No.8 of 1969. The South Eastern State was changed to Cross River state Law Cap.
45. This gave birth to the state Board of Internal Revenue Services, the legal
backing to administer personal income tax.
But on creation of Akwa Ibom State but in 1987, the State established
its own Board of internal Revenue Service from the Cross River State Cap 45 as
applicable here in. this law prevailed until the promulgation of personal
income tax decree 104 of 1993 (Now Act 104, 1993). The functions were
collection of pay As you Earn Tax (PAYA).
Direct Assessment Tax, collection of Tax example: pool betting, fines,
registration and renewed of motor vehicle licenses, driver’s licenses, sales of
badges and plate numbers, collection of other taxes and revenue that belongs to
the State.
However, internal Revenue Service is the engine room, generating money
for the Government of Akwa Ibom State. Its directorate work to make sure that
all tax payers defaulters are prosecuted. Gives and stamp duties are general
for state.
In the area of manpower, as at year 2008, the total staff strength was
850, which was not still enough, with recent developments in generation of
funds for the state government.
Funds is needed because data collection, compilation and regression
method of statistical analysis needs more fund to go and obtain for accurate
and regular publication in which a standby vehicle is necessary to meet the
current demands of taxation.
1.3
STATEMENT OF THE PROBLEM
The problem that prompt
this research is that some of the tax payers do not know that taxation is a significant
tool for economic development, and as
such the tax payers tends to be evade and avoid taxes.
And so, this research intends to disclose the
significant of paying taxes to answer the question of evasion which will allow
for economic development.
1.4
OBJECTIVES OF THE STUDY
The objective of this study includes the following:
1.
To determine the significance of taxation in an economy.
2.
To assess the contribution of taxes towards the state economic growth
and development.
3.
To identify the problems (if any) associated with tax implementation
and
4.
To make recommendations based on research findings.
1.5
RESEARCH QUESTIONS
The following constitute the research questions
for this study:
1.
Does taxations play any significance role in economic development?
2.
To what extent does the Government utilized revenue derived for the
development of the economy?
3.
What are the problems associated with tax collection in the country?
4.
What steps has the Government taken to arrest the problems of tax
evasion in the country?
1.6
STATEMENT OF THE
HYPOTHESIS
Hi -taxation has significance contribution on
economic development of a State.
Ho -taxation does not have any significance
contribution on economic development of a State.
1.7
SIGNIFICANCE OF THE
STUDY
This study would be of value in the following
ways:
1.
It will be a source of reverence materials to subsequent researcher in
this field.
2.
It will enlighten the tax payers of the importance of the paying.
3.
It will broaden the researcher’s scope on the theory of taxation.
4.
The result of this research will help the aggrieved tax payer to know
how his/her quota is being used.
5.
The findings and recommendations of this study will assist the Board of
Internal Revenue (BIR) in developing and improving upon their tax machineries
and policies.
1.8
LIMITATION OF THE STUDY
In the course of
carrying out this research work, there were a lot of factors which acted in
opposite directions towards the completion of this research work.
The following setbacks
were encountered be the researcher:
1.
Inaccessibility of relevant materials in the school library and other
library.
2.
Difficult in collecting Data.
3.
Insufficient time for the research work as the result of short academic
calendar.
4.
Lack of sufficient fund in conducting the research process.
1.9
SCOPE OF THE STUDY
The scope of the study refers to the whole country because of logistics
and financial constraint, the researcher therefore restrict her scope to
Internal Revenue Service, Uyo, and despite other tools for economic
development, for the purpose of this research the scope of this study is
restricted to ”TAXATION”.
1.10
DEFINITION OF TERMS
There were many terms used in this write up which need to be defined to
avoid doubt in the mine of the readers. the following terms are defined as they
reflect their application in this study.
TAX: it is a levy imposed by the Government against
the income, profits or wealth of the individuals, partnership and corporate ‘organization.
(Tabansi, 2001).
TAXATION: is the process or machinery by which committees,
group of persons of individuals are made to contribute part of their income in
some agreed rate and methods for purpose of administration and development of
the society. (Okorle Onovo, 2007).
ECONOMIC DEVELOPMENT: According to Agu (2000),
is the process whereby the level of national production (that is national
income) or per capital income increase over a period of time.
INCOME TAX: According to Okerie Onovo (2007), it is a tax
levied on the income of an individual.
TAX EVASION: is a deliberate act of a tax payer to escape tax
either by running away from collectors or under-declaring his/her income,
omission or misstatement of items from returns. this act is illegal and is
punishable if discovered (Tabansi, 2001).
TAX AVOIDANCE: this is generally considered as a way of identifying the loop-hole in the
tax law and then taking advantage of such a loop-hole to reduced the tax
payable. (Tabansi, 2001).
TAX PAYER: it refers to employer or labour, Government Ministry
and department, parastatals, statutory bodies, institutions and other
established organization approved for the operation.
BOARD: this refers to the bodies which is authorized and
empowered by law for the responsibility of the collection of taxes, they are
sub-head quarter offices located at all the Local Government Area in the
country.(Wikipedia, 2007).
TAX ADMINISTRATION: Cater (2000) defines it
as the management of human and material resources to bring about efficient,
fair and effective tax assessment, collection and accountability so as to
achieved other economic socio-political objectives of the Government.
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