TAX REFORMS ACT AND THE NIGERIAN ECONOMIC DEVELOPMENT.
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TAX REFORMS ACT AND THE NIGERIAN ECONOMIC DEVELOPMENT.
Chapter one
INTRODUCTION
1.1 Background for the Study
This project work will help us comprehend tax reform and Nigerian economic progress.
Taxation was not prevalent in Nigeria in its early years. The economy was mainly self-contained, with people’s lives conducted mostly through the interchange of products and services.
People lived in a limited geographical area, with all land owned by the state and public services provided by the state. The king would send out his tax collectors to collect directly from public services. The town criers were used, and failure to comply would result in penalties from the king.
As the economy evolved and became more complex, as did society, the role of taxation became increasingly significant, and taxation became an instrument of economic development and social transformation. It has a significant impact on the government’s fiscal, monetary, and investment policies.
Every government must evaluate what types of taxes are most appropriate for the country and to what extent each individual should be taxed. The government’s long-term goal determines the tax choice and rate.
It depends on whether a government seeks to cause a re-distribution of wealth by allowing entirely free entrepreneurship with no other social considerations.
In other words, while taxation is an important factor in accelerating growth through savings and investment and equitable income distribution, many fiscal systems have the reverse impact by favouring capital through overt and covert distribution.
Increases or decreases in income tax rates can have deflationary or inflationary impacts because they alter the amount of money available to the private sector of the economy.
1.2 Statement of Problem
Taxes were regarded as one of the primary sources of government revenue in any country. Although there are several issues with tax collection, some of the more common are listed here.
Individuals and private companies frequently declare fraudulent profits or revenue in order to avoid a correct assessment by the tax official; they understand that the official will only levy taxes on the amount of income specified. Another issue is corruption on the side of the tax collector. Not only are taxpayers underpaid, but tax authorities do so for personal gain.
Another issue is that taxpayers are ignorant. Some of them don’t understand why they should pay taxes. They even believed that the so-called money belonged to an official.
As a result, they evade all obligation for paying taxes. Furthermore, some people refuse to pay taxes despite the fact that they are aware that it is mandatory.
Farmers also argue that the collection times are inconvenient for them and that the government should consider collecting taxes during the harvest season.
Against this backdrop, the researcher plans to conduct a study to determine how tax reforms might be used to bridge the gap that exists when tax payers have yet to demonstrate a reasonable level of compliance.
1.3 Research Questions.
The following research questions were created to lead this study:
1. Does paying taxes imposed by a nation’s government have any negative consequences for its citizens?
2. Do private individuals, businesses, and corporations gain by paying taxes on time?
3. Have the officials or administrators encountered any problems in collecting taxes?
1.4 Objectives of the Study
The study’s primary goal is to look into tax reforms and a country’s economic development. While the precise aims include:
1. To educate citizens on the need of paying government taxes to support the nation’s economic prosperity.
2. To educate individuals, businesses, and corporations on the benefits of paying taxes on time.
3. To provide officials or administrators with information that would help to improve and advise them of any problems discovered when collecting taxes.
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