CHAPTER ONE

INTRODUCTION

Responsible governments all over the world, be it at the Federal, State or Local government level, are concerned with the provision of social goods and services for their citizens.

They are responsible for the maintenance of laws and orders within their nations and also for the protection of their territorial integrity against any external aggression.

In carrying out these social responsibilities, a huge amount of money is needed. One of the major sources of fund available to government to execute its numerous programs is imposition of taxes.

Governments at various levels enact laws to impose taxes and to enforce their payment so that enough revenue can be generated to defray their expenditure.

However, despite many stringent penalties and fines in the tax laws, it appears that a lot of individuals and corporate entities still do not see the reason why they should pay correct taxes or pay taxes at all. Hence, they try in some cases to avoid payment of taxes and in

other extreme cases, evade taxes (Bukar, 2004; Omoigui, 2004).

In the light of the above, it is necessary to examine the Nigerian Tax System vis-à-vis the use that the revenues generated from taxes in Nigeria are being put.

The paper is divided into six major parts, namely: the introduction (as given above); conceptual framework; specific uses of tax as a stimulus for growth and development; analysis of data; criticisms of government’s handling of tax revenue; summary, conclusions and recommendations.