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TAXATION AS AN INSTRUMENT OF ECONOMIC DEVELOPMENT IN NIGERIA

ABSTRACT
This research is proposed to investigate taxation as a fiscal policy tool – on its use in solving economic problem such as inflation reduction, harmonization of policies on tax as it relates to government policies and conflict in objectives, inequality, multiple tax problem etc.          
This work is a critical look at the existing forms of taxes in the county. It also looked at the Nigeria tax system in terms of tax policy; tax laws and finally taxes administration. It talked about principles / characteristics of a good tax system and of course, the role of taxation in the Nation’s development.          
Questionnaires were administered on the relevant population sample. Also they were interviewed and data collected, analyzed and interpreted. Chi – square was used in analyzing the data collected. The collected data were tabulated according to their relevance to the hypothesis.         
 It was discovered that some level of stability has been achieved by way of reduction in inflation.          
Also, the production sits for have received considerable amount of encouragement through various incentives given in order to encourage production activity. It was also discovered that provision of tax system on resource allocation, increase in disposable income, has not been sufficient.         
 In all, it was concluded that the Nigeria tax system is fairly adequate.
CHAPTER ONE
1.0     INTRODUCTION     
     
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.          
Mc Graw Hill Dictionary of Eonomic defines economic growth as “an increase in nations or areas capacity to produce goods ad 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.          
The history of taxation can be traced back as far as the ancient empires of world history.  In Nigeria, taxation is not a new thing.  In the pre-colonial days, taxation was practiced in the various sections of the country, this was more evident in the Northern region as a result of it’s organized system of government.  Although, taxation has been a characteristics of all government, the native and form in which it existed differ from one area to the other.  In spite of these different methods of taxation, the system had persisted.  The question that might arise here is why has taxation become a permanent feature of all government.          
The reason for the persistence of taxation is not for fetched, the most important is in the provision of societal needs.  The revenues collected from tax are used in the provision of basis amenities and infrastructure such as electricity, pipe born water, hospitals and other similar services.         
 In addition, tax is used as a fiscal policy tool of economic policy to redistribute income, boost some particular industry, fight inflation and depression and other economic predicament.         
 It has become important to research into this aspect of the economy, since it is the only source of government revenue that has remained fairly stable over the years.  In the early independence days, Agriculture was the main stay of the economy, this dwindle in the 1970s with the discovery of oil, leaving us importers of food items, like rice, beans, and others.          
During the oil glut of 1980s, the prices of petroleum fluctuated regularly this affecting revenue derived from oil

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