TABLE OF CONTENT
Title
page i
Certification ii
Dedication iii
Acknowledgment iv
– v
Table
of content vi
– viii
Chapter One 1
– 12
- Introduction
- Statement
of the Research Problem
- Aims
and Objectives of The Study
- Significances
of the Study
- Research
Question
- Research
Hypothesis
- Scope
of the Study.
- Definition
of the Key Terms.
- Organization of the study.
Chapter Two 13
– 44
2.1 Introduction
2.2 Historical Background
2.3 Government Tax Policy
2.4 Objectives of Taxation
2.5 Principles of Taxation
2.6 Forms of Taxation
2.7 Tax Law in Nigeria
2.8 Tax Administration
2.9 Tax Authorities
2.10 Tax System in Nigeria
2.11 Tax Administration
Problems
2.12 Overview of the Nigeria
Manufacturing Sector
2.12 Tax Policies and
Manufacturing Sector
2.14 Tax Incentives to
Manufacturing Companies
2.15 Industrial
Constraints
Chapter Three 45 – 51
3.1
Introduction
3.2
Population.
3.3
Sample Size and Sampling Techniques
3.4
Type and Sources of Data
3.5
Statistical Method of Data Analysis
3.6
Limitation of the Method.
Chapter Four 52 – 64
4.1
Introduction.
4.2
Data Presentation.
4.3
Data Analysis
4.4
Findings
Chapter Five 65 – 70
5.1 Introduction.
5.2 Summary of
Findings
5.3 Conclusion
5.4 Recommendation
References 71
– 72
Appendix 73
Questionnaire 74 – 75
CHAPTER ONE
INTRODUCTION
Nigeria the most populous nations in Africa are governed by federal system, hence her fiscal operation also adheres to his same principle. This has serious implication on how the tax policies are structured and operated in the country. The government fiscal power is based on a three-tier structure divided between the federal, state and local government each of which has different tax jurisdiction. As at 2002, about 40 different taxes and levies are shared by all three levels of government.
Since the late 1980s tax policy (a
fiscal policy instrument) has become a major tool in Nigeria. The reason for this not
for fetched.
First is the need for reconstruction
after the civil war, the industrialization strategy adopted by then import
substitution industrialization policy. Second reason for the rise in the role
tax policy is the falls in the international price oil in the late 1980s this
gave rise to the dominance of fiscal policy of which tax policy is major
instrument in the management of the economy.
Also the persistent budget deficit
since the early 1970s and given the fall in oil revenue made way for the
requirement of a new tax focus that saw the emergence of various reforms in tax
policy.
However, buy the sector was
observed, that the formal private sector was going extinct, economic activities
measured by aggregate output, industrial production non-oil exports etc. were
all showing distress signs. Above all there were strong and wide evidence of
pervasive and decline in the set up of the manufacturing sector leading to
reduced profitability in spite of
increase incentives give to the sector by 1986, all socio-economic indicate
were pointing toward the downward direction. In sum, there was severe in
balance in the sector, it was apparent that the economy required major
structural adjustment.
The structural adjustment programme
was introduced in 1986 to provide t he conceptual frame work for the government
participation in the process of industrialization, tax and related policies fro
influencing industrial development. It also desired to achieve high economic
growth increase in the share of manufactures.
Just immediately after the
introduction of structural adjustment programme it was observed that the reform
measure could not be sustained as the out put of the manufacturing sector was
responding negatively.
In the recent years, the present
civil administration in Nigeria
is giving a great deal of Allenton to the manufacturing sector in the eye of
various tax policies. Through the manufacturing sector not an exclusively
sub-sector in the industrial sector but it is a fact that is largely a major
sector in the Nigerian economy. It comprises wide range of enterprise mostly
producing consumer goods. In order to move from production of consumer goods.
In order to move from production of consumer goods only to production of
capital goods a number of incentives were put in place to boost capital stock.
It is worthy of note that a number of amendments have been made to some of
these tax policies. These include the company income tax act 1990, pioneer
legislation, of our basic industries which are expected to promote is an
appreciation of this, that government embarked on the development of a number
of basic industries such as iron and steel, pulp and paper machine tools,
petrol chemicals etc.
Unfortunately, most of these are yet
to operate effectively on account of the well known problems of inadequate
supply of raw materials, spare parts, infrastructural constraints and weak
managerial capacity.
Administrative
and institutional bottle needs industrials have persistently complained above
the unfavorable investment climate existing in the country, including bottle
neck in the administration of various permits and approved for starting and
operating business. This bureaucratic bottle neck coupled with economic
indiscipline causes a lot inconveniences and administrative delays and all
these business in the country. Also, the lack of clarity of government policy
of payment of royalties of transferring industrial technology from abroad.
Competition with imported Goods
An important features of capital goods imported into Nigeria is that, they are bought in as fairly use machines, equipment and spare parts. Especially goods produced form these machines and equipment are sub-standard which makes them to be poorly priced if they find their way to the international market, as against higher quality goods form the mere technologically advanced countries. Capital gain tax, import duties and host of others. These amendments are to ensure rapid response to charge in the manufacturing sector.
1.1 PROBLEM
STATEMENT
The character of government tax policy in an important signal to economic agent, despite several tax incentives introduced in the economy and given the importance of a tax policy in the income management in Nigeria, the manufacturing sector in Nigeria is still being characterized by enhancing growth. One could then ask what was the role of tax policy in inducing growth in the manufacturing sector in Nigeria.
What are the objectives of tax
policy? What characteristic does the Nigeria government tax policy
posses? Can the tax policy be designed to ensure high performance without
bringing corresponding instability in the economy?
The high tax regime though claimed
to ensure maximum revenue accrue to government is structured in a way t hat is
highly characterized by this giving no room for the emergence of new companies
and greater performance.
Furthermore, the unpredictable
nature of the tax policy frame work paying way of maximization of revenue thus
creates a harsh tax climate that encourages evasion. The structures of tariff
and double taxation which have encouraged anti-export bias have also left much
to be desired companies within the manufacturing sector have now found a way of
mitigating the effect of the above mentioned challenges by way of evading tax
and this not bring about desirable economic development.
Finally, the attendant problem of
lack of sufficient incentive to private enterprises in the form of development
rebate, tax holiday, accelerated depreciation allowance, reduced tax related,
that ensure manufacturing enterprises are started and expanded within the
economy have made the sector remain producers of consumer goods which does not
however enhance sustainable economic growth.
1.2 AIMS
AND OBJECTIVES
The main aim of this study is to
assess the government tax policies on the performance of the manufacturing
section Nigeria
with the specific objectives of:
i. Examine the tax policies in the
country
ii. Examine the significance and the contribution of the manufacturing sector to the development of Nigeria economy.
iii. To deal with issues rose in the problem
statement.
iv. To examine the effect of government tax
policies.
v. To create flora upon which other
research work can be based.
1.3 SIGNIFICANCE
OF THE STUDY
In spite of the importance of a
result oriented tax policy in the country, attempts have not been made to
assess development over the years. The tax system in Nigeria is lopsided. This study is
of high importance considering the fact
that it spans through the largest sub-sector in the individual sector of
the Nigeria economy there is the strong need to investigate how tax policies affect this important sector
which act as an engine of growth in both developed and the developing countries
of the world.
1.4 RESEARCH
QUESTIONS
The following research questions are
governance to the study and answers sought to them:
1. What are tax policies operating in Nigeria?
2. Has Nigeria tax system functioned
effectively and efficiently?
3. Of
what importance is the manufacturing sector in the Nigeria economy?
4. What
implication does the government tax policy have on the manufacturing sector?
5. Is the Nigeria tax system properly
arranged and administered?
1.5 RESEARCH
HYPOTHESIS
Null hypothesis (Ho): government tax
policies do not affect the performance of the manufacturing sector.
Alternative hypothesis: government
tax policies affect the performance of the manufacturing sector.
1.6 SCOPE
AND LIMITATION OF THE STUDY
The research work will cover five
years financial analysis within this present civilian regime. There are wide
and varied policy threat of tax policies, this study focus on company income
tax, excise duties and import duties education tax.
However, a major limitations of the study is lack of access data, this is as a result of some in formation that were classified in the course of the field study. It must also be added that the research work is glimpse of part of possible solution to any interested party on the subject.
AN ASSESSMENT OF GOVERNMENT TAX POLICY
