The research work will discuss in detail the impact of taxation as an aid

to Economic Development in Enugu State. It will also take cognizance of the

aims and objectives of taxation and its impact on the economic developments

of Nigeria. It also aimed at identifying problems that inhibit the efficient and

effective administration of the Nigeria tax’s system.

      The chapter one of this work is going to discuss in brief, the

introduction, statement of the problem, purpose of the study, significance of the

study, scope of the study, limitations of the study, assumptions of the study,

formulation of hypothesis and definition of terms.

      In chapter two, the researcher will deliberate on: Definition of Tax and

types, incidence of taxation, principles of taxation, element of taxation,

importance of taxation, structure and administration of Nigerian Tax system,

appraisal of some tax legislation and taxation functions and problems.

      Chapter three will consider design and methodology, selection of data:

primary data, secondary data, population, sampling technique, sample size and

problems of data collection.
      Chapter four will deliberate on the data presentation and analysis,

interpretation of result and test of hypothesis.

        Conclusively, chapter five will centre on the summary of the findings,

    conclusion from the study, recommendation and suggestion for further

                          TABLE OF CONTENTS

Title page

Approval page




Table of Contents


1.0   Introduction

1.1   Background of the study

1.2   Statement of the problem

1.3   Objectives of the study

1.4   Significance of the study

1.5   Scope and Limitations of the study

1.6   Assumptions of the study

1.7   Formulation of Hypothesis

1.8   Definition of Terms

2.0   Review of Related Literature

2.1   Introduction

2.2   Definition of Tax and Types

2.3   Incidence of Taxation

2.4   Principles of Taxation

2.5   Element of Taxation

2.6   The Importance of Taxation

2.7   Appraisal of some tax legislation

2.8   Structure of Administration of Nigeria Tax System

2.9   The problems of taxation and its function


3.0   Design and Methodology

3.1   Primary Sources of Data

3.1.1 Personal/Oral Interview

3.1.2 Questionnaire Method

3.2   Secondary Sources of Data
3.3   Population and Sample Size Determination

3.4   Methods of Data Collection

3.5   Method of Validating the instrument

3.6   Method of Data Analysis

3.7   Problems of data collection


4.0   Presentation of Analysis of Data

4.1   Presentation of related data

4.2   Analysis of Data

4.3   Test of Hypothesis

4.4   Interpretation of Result


5.0   Summary of findings

5.1   Conclusions

5.2   Recommendations


                                  CHAPTER ONE



      One of the major functions of any government especially developing

countries such as Nigeria is the provision of infrastructural services such as

electricity, pipe-borne water, hospitals, schools, good roads and as well as

ensure a rise in per capita 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 to augment government financial position. 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 Decree (CIID), Joint Tax Board (JIB) 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 as an aid to the

economic development of Enugu State (Nigeria).


      The first need of any modern government is to generate enough

revenuewhich is indeed “the breath of its nostril”. Thus taxation is by far the

most significant source of revenue for the government.       Nigerians regard

payment of tax as a means whereby government raises revenue on herself at

the expense of their sweat.

      It is good to note that no tax succeeds without the taxpayer’s co-

operation. Here, we can ask some thought-provoking questions such as: what

makes taxation such a difficult issue? Why do people feel cheated when it

comes to tax? Is government making judicious use of taxpayer’s money? In

view of these questions above, this study is going to be carried out to offer

solution to them.
      We shall also look at the following issues and offer recommendations.

1.    Problems affecting the successful operation of tax system in Nigeria.

2.    How to determine the Assessable income.

3.    Process of tax administration in Nigeria.


      The general objective of the study is to assess the contribution of taxes

towards the growth of the Enugu State Economy.

      However, the specific objective of the study includes:

1.    To examine the relevance of taxation in Enugu State.

2.    To determine why people feel cheated when it comes to tax.

3.    To determine the extent government has been using revenue generated

      from tax.

4.    To examine how tax rate affects the rate of investment in the economy.

5.    To know general desirability of firms to invest as a result of tax

      incentive measures.
      Generally, the work is done to find out if tax constitutes the bulk of

government revenue and to erase the erroneous that it is an exploitation by

government for their selfish interest.


      One of the most frequently discussed issues in Nigeria is how to solve

the economic hardship in the country and how to create an industrial base that

can be guarantee self sustaining economic development. Also one wonders

why a country which is richly endowed with the necessary human and material

resources and which the people pay tax has been turned a heavily indebted


      The study will afford us the opportunity to know the roles taxation play

in the Enugu State economy such roles includes:

1.    Taxation is a major source of revenue to the government.

2.    Revenue generated from tax enables government performs its functions


3.    Taxation acts as an instrument of fiscal policy.

4.    The impact of tax on small business in the state.
5.    The study will in addition reveal if there are other better sources of

      government funding.


      The scope of this study covers critical examinations on the impact of

taxation on Enugu State economic development. It will also analyse other

related issues such as structure and administrative machinery of tax in Enugu

State and their associated problems.     The essence of this digression is to

possibly find out the obstacles if any, that hinder the effective collection and

administration of tax in the State.


      It can be seen from all indications that a research such as this cannot be

carried out in one semester. There are constraints that limit the work of the

researcher. Among these are:

-     Inadequate Time: The time available is very limited, as a result of this,

      the researcher is restricted to some places for interviews and questioning

      during the collection of data.
-     Insufficient Fund:       The funds available to the researcher is not

      sufficient to carry out this research work. As a result of high economic

      hardship as well as high cost of transportation.

-     The inability of some government officials to disclose certain reliable

      information which they considered confidential may also limit the study.

-     There is also scarcity of current textbooks on tax because tax laws are

      constantly changed and so many textbooks are obsolete for this topic.

      Finally, the academic workload on the campus is one of the limiting

factors on this research work. Despite all these constraints, the researcher is

able to carry out a fair and effective study on this topic.


      The researcher in carrying out this study will make the following


1.    That the data that will be used are true and fair figures of taxes actually

      collected by the Federal Government in each year of assessment.

2.    That the data will be authentic and can be relied on for further research

      work on the topic.
3.    That the data is going to form the basis of the research work.


      To enable the researcher test if there exist any correlation between

revenue generated from tax and its impact on the Enugu State economy, some

statistical model will be used based on the response from the oral interview

carried out and the questionnaire distributed, the data gathered from here will

be used to test the following hypothetical statement (assumption).


      The Null Hypothesis (Ho): Revenue generated from tax does not make

any impact on the economic development of Enugu State

      The Alternative Hypothesis (HA): Revenue generated from tax has a

positive impact on the economic development of Enugu State.


      The Null Hypothesis (HO): That tax evasion and avoidance do not

affect tax revenue.
       The Alternative Hypothesis (HA): that tax evasion and avoidance do

affect tax revenue.


       The Null Hypothesis (HO): That revenue generated from tax is so

merger compared to revenue from other sources as such, government can do

with tax.

       The Alternative Hypothesis (HA):       That tax is a major source of

government revenue and as such government cannot do without tax.


TAX:         A compulsory levy by the government on its citizen for the

             provision of public goods and services.

TAX BASE: The object which is taxed for instance personal income, company


TAX RATE: The rate at which tax is charged.

TAX INCIDENCE: It offers to the effect of and where the burden is finally

FBIRS:   Federal Board of Inland Revenue Services. It is an operational

         arm of Federal Board of Inland Revenue which is responsible for

         the Federal Tax matters.

CITA:    Company Income Tax Act (CITA) is a federal law operated by the

         FIRS, which deals with the taxation of all limited liability

         companies in Nigeria with the exception of those engaged in

         petroleum operations.

JTB:     Joint Tax Board (JTB) is established under Section 85(1) of

         Decree 104 of 1993 to arbitrate on tax disputes between one state

         tax authority and another.

VAT:     Value Added Tax is a multistage tax levied and collected on

         transactions at all stages of sales and distribution.

CGTA:    Capital Gain Tax Act is an act that stipulates that all capital gains

         arising on disposal of asset of individual partnership and limited

         companies should be taxed.

PPTA:    Petroleum Profit Tax Act is an act that regulates the petroleum

         profit tax and also specifies how profit from petroleum will be

WITHHOLDING TAX: This is tax charged on investment income namely:

           rents, interest, royalties and dividends, presently it is charged as

           the tax offset.

PROGRESSIVE TAX: This is a tax incidence that increases as the size of

           income increases.

REGRESSIVE TAX:          A tax is regressive when its tax rate decreases as the

           income increases.

EXCISE DUTIES: These are taxes on some goods manufactured within a


PERSONS: It includes all taxable persons whether it be individual or

           corporate bodies.

1.   A. K. Ageyi (1985) Economic Development for West Africa,
     First Edition.

2.   J. E. Ove (1968) Taxation and Economic Development in
     Tropical Africa.

3.   W. U. Ani (2004) Companies Income Tax in Nigeria: An
     Instructional Approach Revised Ed.
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