TAXATION AND ITS EFFECT ON THE NIGERIA ECONOMY (2000 – 2013)
CHAPTER ONE
INTRODUCTION
One of the major functions of the government especially developing countries such as Nigeria is the provision of infrastructural services such as electricity, schools, hospitals, pipe-borne water, good roads and as well as ensure a rise in per-capital income, poverty alleviation to mention a few. For these services to be adequately provided, government should have enough revenue to finance them. The task of financing these enormous
responsibilities is one of the major problems facing the government. Based on the limited resources of government, there is need to carry the citizens (governed) along hence the imposition of tax on all taxable individuals and companies/organizations to augment government financial position is essential.
To this end, government have always enacted various tax laws and reformed existing ones to stand the taste of time. These laws include: Income Tax Management Act (ITMA), Companies Income Tax Decree (CITD) etc.
All these are aimed at ensuring adherence to tax payment and discouraging tax evasion and avoidance. For the purpose of this study, the researchers would be concerned with the impact of taxation on Nigeria economy.
1.1 BACKGROUND OF THE STUDY
The earliest trace of any form of direct taxation in Nigeria even before the British Administration was in Northern Nigeria. The North was favored for this because it had a form of organized central administration under the Emirs unlike the south which except in few places in the west was not as organized. Furthermore, the Muslin religion adhered to by the people approved of taxation as being consistent with the demand of Islam. Thus taxes such as Zakka, Gada, Kindin, Kararat and Jangoli which were typical forms of taxes on agricultural products and livestock. With the coming of the British and their consequent colonization of Nigeria they took advantage of tax system that was existing in the Northern part of them country to introduce direct taxation into the area since that was the only alternative available to them to arise fund to administer the region.
