TAXATION AS A SOURCE OF REVENUE TO THE GOVERNMENT

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Some of the major functions of any government especially developing countries such as Nigeria are the provision of infrastructural service such as electricity, pipe-borne water, hospitals, schools, good roads and as well as ensuring rise in per capital, income, poverty alleviation etc. 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. Base on the limited resources the government, there is need to carry the citizens governed along hence, the imposition of tax on all taxable individuals and companies to augment government financial position becomes imperative. To this end, government have always enacted various tax laws and reformed existing ones to stand the taste of time. They include: Income Tax Management Act (ITMA), Companies Income Tax Degree (CITD), Joint Tax Board (JTB) etc. All these are aimed at ensuring adherence to tax payment and discouraging tax evasion and avoidance. For the purpose of this study, the researcher would be concerned with the impact of taxation on Kogi State State Revenue, a case study.

1.2 Statement of the Problem
Nigerians regard payment of tax as a means where by government raise revenue for herself at the expense of their sweat.
It is good to note that no tax succeeds without the tax-payer’s co-operation. Here, we can have some thought-provoking questions such as, what makes tax such a difficult issue? Why do people feel cheated when it comes to tax? Is government making judicious use of tax payer’s money?
In view of these questions above, this study is going to be carried out to offer solution to those questions above. We shall also look at the following issues and offer recommendations.
The problems affecting the successful operation of tax system in Nigeria is how to determine the assessable income process of tax administration in Nigeria.

1.3 Objectives of the Study
The general objective of the study is to the system of revenue collection and its enforcement in Kogi State.However, the specific objective of the study includes:
i. To examine the relevance of tax in Kogi State.
ii. To determine the extent government has been using revenue generated from tax.
iii. To examine how tax rate, affects the rate of investment in the economy.
iv. To determine the system of revenue collection in Kogi State.
Generally, the work is done to find out the impact of tax on government revenue whether tax constitutes the luck of government revenue and to erase the enormous exploration by government for their selfish interest.

1.4 Research Questions
To find answers to the problems of the study, the following research questions have been formulated.
i. How is taxation a source of revenue to the Government?
ii. To what extent does the revenue generated from tax affect the economic development in Kogi State State?
iii. What are the benefits of paying tax?
iv. What are the laws governing the payment of tax?

1.5 Significance of the Study
One of the most frequently discussed issues in Nigeria is how to solve the economic hardship in the country and how to create industrial bases that can be a guarantee for self-sustaining economic development. Also, one would wonder why a country which is richly endowed with the necessary human and material resources and which people pay tax has been turned a heavily indebted country.
The study will afford us the opportunity to know the roles taxation plays in Kogi State State. Such roles include:
i. Taxation is a major source of revenue to the government.
ii. Revenue generated from taxation enables government performs its function effectively.
iii. Taxation acts as an instrument for focal policy
iv. The study will in addition reveal if there are other better sources of government revenue or finding.

1.6 Scope of the Study

The scope of this study covers Taxation as a source of Revenue to the Government, a case study of Kogi State State Board of Internal Revenue. It will also analyse related issues such as structure and administrative machinery of taxation in Kogi State State and their associated problems.
The essence of this digression is to possibly find out the obstacle if any, that hinder the effective collection and administration of tax in the state.

1.7 Limitation of the Study

In view of the fact that there is limited time and some other constrains such as finance and material, the study is specially carried out in Kogi State State Board of Internal Revenue.
Due to limited time factor and finance available for use in order for easy data collection, thus research will be restricted in available time and finance.
1 Time Factor and Fund: The constraints of time and funds, the time required to complete this study is rather, short and the finance is sufficient because the researcher is compelled by the condition share is available time and finance between normal semester and the research work. Considering the finance fact of the constraints, the study seems to be rather expensive because of the research financial or fear of embarrassment and other negative actions.

Willingness of Respondent: The administration of the questionnaire is limited to willing or persuaded persons alone fall for a study of this nature.

Outdated Materials: Thirdly, there is still the constraint of lack of relevant data to carry out this work successfully.
1.8 Definition of Terms
i. Taxation: This is the process or system of raising income through the levying of various types of taxes.
ii. Tax: A tax is a compulsory levy imposed by a public authority on the income, profit, or wealth of an individual, family, community, co-operate or Inco-operated body.
iii. Fiscal Policy: This is the aspect of government policy that deals with the raising of revenue through taxes and other means and also with decision relating to level and pattern of government expenditure.
iv. Assessment: An assessment is the process ascertaining the taxable income of a tax payer.
v. Tax Avoidance: – It involves the use of loopholes in the prevailing tax laws to avoid the payment of tax. Its is not a criminal act.
vi. Tax Evasion: – It is done either making fraudulent and incorrect tax returns or not making any at all, true or untrue its is a criminal act.

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

In this chapter, the research will take look at the various definition of taxation by different authors through the review of text books, journals, magazines, etc. The researcher will also look at some sub topic in taxation in other to broaden our knowledge. For instance, the principles of taxation source of tax laws, classification of tax, tax problems, and the effect of taxation to the government revenue etc.

2.2 Definition of Tax and Taxation

Tax: Webster’s dictionary of current English describes tax, simple as a charge imposed by the government authority upon property, individuals or transactions. This definition seems not to recognize the fact that tax can be imposed for reasons other than public revenue generation e.g Tax can be used to encourage or discourage the production and consumption of certain products
Bhatia (2003) defines tax as a compulsory levy payable by an economic unit to the government without any corresponding entitlement to receive a definite and direct quid pro quo from the government.