CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Economic development is the first priority of every developing nation, Nigeria being a developing nation is no exception. The concept of economic development is closely related to economic growth, these two concept are more often than not used interchangeably. Even among the economist, consensus had not yet been reached as to the difference between the two concepts. While one school of thought see the two as the same, the other school of thought differentiate economic development from increase in Gross National Product. The two concept however, shall be used interchangeably for the purpose of this study. McGraw Hill Dictionary of Economic defines economic growth as “an increase in nations or areas capacity to produce goods and services coupled with an increase in production of these goods and services. To provide goods and services, however the government needs to purchase goods and services from the private sector and to employ labour. Given the comparatively limited amounts of resources that it is ordinarily possible and product to obtain from abroad and from domestic borrowing and non-tax revenue, most of the developing countries have felt the need to increase tax revenues. Tax as defined by the international dictionary of English is “money paid to the government usually a percentage of personal income or of the cost of goods and services bought”. Tax is a compulsory levy or payment imposed by the government of a nation on her citizens through an organized or specialized unit or agency. The process of collecting tax is called taxation since tax is an obligation, it is not a matter of choice but of necessity for the citizens to pay tax.
