TAXATION AS AN ALTERNATIVE INSTRUMENT FOR ECONOMIC GROWTH IN NIGERIA 2000-2014
CHAPTER
ONE
ONE
1.0
INTRODUCTION
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
BACKGROUND OF THE STUDY
According to Black Law
Dictionary, tax is a ratable portion of the produce of the property and labour
of the individual citizen, taken by the nation, in the exercise of it’s
sovereign right, for the support of government, for the laws, and as the means
for continuing in operation the various legitimate function of the state. The Institute of Taxation
of Nigeria
(2002) viewed tax as ‘an imposed or enforced contribution of money, enacted
pursuant to legislative authority. If there is no valid statute by which it is
imposed, a charge is not tax’.
Dictionary, tax is a ratable portion of the produce of the property and labour
of the individual citizen, taken by the nation, in the exercise of it’s
sovereign right, for the support of government, for the laws, and as the means
for continuing in operation the various legitimate function of the state. The Institute of Taxation
of Nigeria
(2002) viewed tax as ‘an imposed or enforced contribution of money, enacted
pursuant to legislative authority. If there is no valid statute by which it is
imposed, a charge is not tax’.
Tax is assessed in
accordance with some reasonable rule of apportionment on a persons or property
within jurisdiction. Sanni (2007) advocated tax as an instrument of social
engineering which can be used to stimulate general or special economic growth. Nigeria is
richly blessed with oil and gas among other mineral resources, but the over
dependence on oil revenue for the economic growth and development of the country
has left much to be desired.
accordance with some reasonable rule of apportionment on a persons or property
within jurisdiction. Sanni (2007) advocated tax as an instrument of social
engineering which can be used to stimulate general or special economic growth. Nigeria is
richly blessed with oil and gas among other mineral resources, but the over
dependence on oil revenue for the economic growth and development of the country
has left much to be desired.
According to Ariyo
(1997) he posited that “Nigeria
over dependence on oil revenue to the total neglect of other revenue source was
encouraged by the oil boom of 1974. This is unsustainable due to the
fluctuation in the oil market which have in most cases plunged the nation into
deficit budget”. It was the view of Popoola (2009) that, Nigeria tax
administration and practice be structured towards economic goal achievement
since government budget for the year centers on the oil sector.
(1997) he posited that “Nigeria
over dependence on oil revenue to the total neglect of other revenue source was
encouraged by the oil boom of 1974. This is unsustainable due to the
fluctuation in the oil market which have in most cases plunged the nation into
deficit budget”. It was the view of Popoola (2009) that, Nigeria tax
administration and practice be structured towards economic goal achievement
since government budget for the year centers on the oil sector.
While decrying the low
productivity of Nigerian tax system, “deficiencies in the tax administration
and collection system, complex legislations and apathy on the part of those
outside the tax net” were identified as some of the root causes. Ijewere (1991)
and Ndekwu (1991) as cited in Ariyo (1997). The incessant unemployment and lack
of basic infrastructure in major parts of the country are product of poor tax
system which could have provided for alternative source of revenue. The sudden
mega city status attained by Lagos
State was as a result of
a well structured tax system which has helped in the growth and development of
the state.
productivity of Nigerian tax system, “deficiencies in the tax administration
and collection system, complex legislations and apathy on the part of those
outside the tax net” were identified as some of the root causes. Ijewere (1991)
and Ndekwu (1991) as cited in Ariyo (1997). The incessant unemployment and lack
of basic infrastructure in major parts of the country are product of poor tax
system which could have provided for alternative source of revenue. The sudden
mega city status attained by Lagos
State was as a result of
a well structured tax system which has helped in the growth and development of
the state.
With the growing
population of the country, the government need to develop alternative streams
of financial relief aside from crude oil in other to combat the increasing need
for welfare and security services of her populace. Section 14 (29) of the 1999
constitution states ‘the security and welfare of the people shall be the
primary purpose of government…’ (Olaoye 2008).
population of the country, the government need to develop alternative streams
of financial relief aside from crude oil in other to combat the increasing need
for welfare and security services of her populace. Section 14 (29) of the 1999
constitution states ‘the security and welfare of the people shall be the
primary purpose of government…’ (Olaoye 2008).
Taxation can play a
significant role in advancing the growth of the economy if it is well structure
and money accrued from it are channeled towards infrastructure and social
amenities. Proper mobilization of resources from taxation is seen as the key to
unlocking public investment, unemployment and overall economic growth.
Government must also take care in curbing tax evasion and avoidance which is
common among Nigerian. Country like Britain majorly depends on tax to
generate revenue and provide basic needs for her citizens.
significant role in advancing the growth of the economy if it is well structure
and money accrued from it are channeled towards infrastructure and social
amenities. Proper mobilization of resources from taxation is seen as the key to
unlocking public investment, unemployment and overall economic growth.
Government must also take care in curbing tax evasion and avoidance which is
common among Nigerian. Country like Britain majorly depends on tax to
generate revenue and provide basic needs for her citizens.
Therefore, a well
structured tax administrative system would in a long way address the inadequate
financial resources which is needed for economic growth and development.
structured tax administrative system would in a long way address the inadequate
financial resources which is needed for economic growth and development.
1.2 STATEMENT
OF THE PROBLEM
OF THE PROBLEM
For any government to
achieve it’s primary function of providing essential services (security and
welfare) to the people of her country, a sustainable revenue generation policy
must be adopted in other to grow and develop.
achieve it’s primary function of providing essential services (security and
welfare) to the people of her country, a sustainable revenue generation policy
must be adopted in other to grow and develop.
One of the greatest
challenges of the government of today is lack of basic amenities, wealth
redistribution to establish equality and also to create another major source of
financial income aside from oil. One major question the government of today
need to answer is when the black gold (crude oil) Well dries up today, how do
we survive as a nation?
challenges of the government of today is lack of basic amenities, wealth
redistribution to establish equality and also to create another major source of
financial income aside from oil. One major question the government of today
need to answer is when the black gold (crude oil) Well dries up today, how do
we survive as a nation?
The Nigerian economy is
a ‘mono-economy’ which mainly depend on one commodity which is oil. Though, oil
still stand as the major source of foreign exchange of the country which
implied that, government earn most of her income through oil taxes, but since
it is not the only method of generating revenue, this has been a failure of
successive administration in the country who have shy away from other sources.
a ‘mono-economy’ which mainly depend on one commodity which is oil. Though, oil
still stand as the major source of foreign exchange of the country which
implied that, government earn most of her income through oil taxes, but since
it is not the only method of generating revenue, this has been a failure of
successive administration in the country who have shy away from other sources.
1.3
OBJECTIVE OF THE STUDY
OBJECTIVE OF THE STUDY
The overall objective
of the study is to evaluate taxation as an alternative instrument for economic
growth in Nigeria
with a view of suggesting some solving measures, the specific objectives are;
of the study is to evaluate taxation as an alternative instrument for economic
growth in Nigeria
with a view of suggesting some solving measures, the specific objectives are;
(i)
To examine ways in which more revenue
could be generated through taxation.
To examine ways in which more revenue
could be generated through taxation.
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