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THE IMPACT OF TAX AS A SOURCE OF REVENUE

  • Department: ACCOUNTING
  • Chapters: 1-5
  • Pages: 50
  • Attributes: Questionnaire, Data Analysis, Abstract
  • Views: 103
  •  :: Methodology: Primary Research
  • PRICE: ₦ 3,000
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ABSTRACT

It is widely known that taxation is a source of revenue to the government and it is also a coercive exploration to the payers. It is also an instrument for the fiscal policy either for expectionary or contractionary.

When it is expectionary the government expenditure increases, the income increases, the consumption increases, thus resulting to investment multiplier and employment increase. In other way, increase in government expenditure lead to increase in taxation which can lead to reduction in investment and consumption reduce and employment reduces.

In every society, there exists a direct relationship between the levels of needs and the amount of resources of its socio-economic development. For this reason taxation, has become what might be called a necessary evil”, this is so because the burden of development is shared among the populace according to their incomes expectedly earned during a given period their property and/or their consumption. It is “evil” in the sense that, it is inconvenient to part with an amount of money which cannot decide.

As society continues to grow in size and the levels of needs of the populace increases man began to adopt system of taxation that is equitable of generating sufficient revenue that is commensurate to the need level. As a result of growth of fiscal group, governments have been encouraging individuals and corporate bodies to undertake certain community development projects and services as part of their social responsibility initiatives.

The purpose of this project is to examine the impact of tax as a source of revenue with reference to Lagos State Board of Internal Revenue.

This objective of the project is to evaluate the economic implication of taxation in the state. It also examine the effectiveness of Lagos State Board of internal Revenue.

Each chapter contains comprehensive statement and principle together with relevant references.

CHAPTER ONE

INTRODUCTION

1.0       BACKGROUND OF THE STUDY

Every known society (ancient or modern) prides its development and progress on the amount of wealth it could generate sustain and multiply for effective social, economic and political development.

Sometimes, leaders are observed to maximize these wealth for their personal glory and ambition. History is replete with tales of races, tributes and tolls period by a colonized ex-defeated people to their invader. In modern times, such inversion has taken another name colonialism.

For colonialism, the essence shifts from existing tributes from the host community to appropriating the vast resources of the colonies the colonialists have ruled over. The research for invasion is not different from the reasons for colonialism. Both forms are carried out in order to undertake some kind of development (social or economic) basic home or abroad. The colonialization of Nigeria in the early 20th century by Britain was not to carry out an expansionist programme, but was in part or plan to ensure that factories and plants in British cities and towns are not short down due to inadequate supply of raw materials. A clear case of developing a foreign economy with local resources are the concept of social or economic development thrives on the principles of resources generation.

In every society, there exists a direct relationship between the levels of needs and the amount of resources of its socio-economic development. For this reason taxation, has become what might be called a necessary evil”, this is so because the burden of development is shared among the populace according to their incomes expectedly earned during a given period their property and/or their consumption. It is “evil” in the sense that, it is inconvenient to part with an amount of money which cannot decide.

As society continues to grow in size and the levels of needs of the populace increases man began to adopt system of taxation that is equitable of generating sufficient revenue that is commensurate to the need level. As a result of growth of fiscal group, governments have been encouraging individuals and corporate bodies to undertake certain community development projects and services as part of their social responsibility initiatives. These initiative come in various forms such as:

  1. Sponsorship of games and sports
  2. Sponsorship of educational programme through scholarship for indigenous students
  3. Underwriting medical bills for helpless victims of fire or chemical bias, or those with debilitating aliments.
  4. Construction of water and electrical projects.
  5. Offering material and financial assistance to orphanages, deshire homes etc.
  6. Road or bridge construction for resurfacing.
  7. Classroom or school blocks construction and donation of books and reading material for libraries.
  8. Adoption, beautification word junctions and round about etc.

The financial implications of these activities are that they are tax deductible. In other words, the taxable income of the individual or organization are exclusive of the costs of these projects.

Thus, since governments have the responsibility to provide social amenities for her citizens the purpose of the tax system is to enable it spread this burden among all its people in an acceptable way. According to the fairness or equitability of the tax system is best evaluated on the principles of the payer’s benefits and the ability to pay. As a general rule. Daughters et al (1980), suggest that income tax records and returns should be kept together with major expenditures which would verifiable before they are substrated from income to lower the amount of taxes to be paid to the government.

1.1       STATEMENT OF PROBLEMS

The statement of problems could be stated below:

  1. Lack of compliance by tax payers and
  2. Challenges of tax evasion and avoidance
  3. Ineffectiveness of machineries put in place for tax collection and administration.
  4. Sharp practice by tax efficients leading to reduction in tax remittance.

1.2       OBJECTIVE OF THE STUDY

The objective of this study shall be based on the following:

.