THE EFFECTIVENESS OF TAXATION ON GOVERNMENT PROVISION FOR INFRASTRUCTURE FOR BENUE STATE.

THE EFFECTIVENESS OF TAXATION ON GOVERNMENT PROVISION FOR INFRASTRUCTURE FOR BENUE STATE.

Chapter one

Introduction.

One of the primary tasks of the government, particularly in developing countries such as Nigeria, is to provide infrastructural services such as power, schools, hospitals, piped water, good roads, and to assure an increase in per capita income and poverty reduction, to name a few.

For these services to be adequately provided, the government must have sufficient revenue to fund them. One of the most pressing issues for the government is how to fund these massive duties.

Given the government’s limited resources, there is a need to carry the citizens (ruled), hence levying taxes on all taxable persons and businesses/organizations to supplement the government’s financial position is critical.

To this purpose, the government has always created new tax laws and amended existing ones to withstand the test of time. These laws include the Income Tax Management Act (ITMA) and the Companies Income Tax Decree (CITD).

All of these measures are intended to promote tax compliance while preventing tax evasion and avoidance. The researchers’ primary concern in this study would be the influence of taxation on the Nigerian economy.

The Nigerian tax system has experienced considerable adjustments in recent years. The Tax Laws are being revised with the goal of eliminating obsolete sections while streamlining the main ones.

Under current Nigerian legislation, tax revenue is enforced by three levels of government: federal, state, and local, with each having a clearly defined area as outlined in the Taxes and Levies Act 1998.

The entire purpose of tax income is to create revenue to enhance the welfare of a nation’s people, with an emphasis on fostering economic growth and development by providing basic amenities for improved public services through efficient administrative systems and structures.

Tax money is critical to promoting economic activity and development. The government uses tax income to guarantee that resources are directed towards essential societal programs while also providing assistance to the poor. If tax income is not properly administered, its impact on economic activity and growth may be negligible.

This necessitates a thorough assessment of the relationship between tax revenue and the economy in order to develop appropriate policies and strategies for its efficiency. According to Olashore (1999), the Nigerian economy has been in a deep slumber, with macroeconomic indices indicating a need for rejuvenation, resuscitation, and perhaps radical restructuring.

Oni (1998) also believes that tax administration should be overhauled, and that tax refunds and duty drawbacks should be administered more efficiently.