AN OVERVIEW OF TAX AND ECONOMIC DEVELOPMENT IN NIGERIA

Abstract

Tax is a method of raising revenue while revenue ordinarily should be channeled back entirely into productive use by the Government. It promotes economic policies such as savings, investment, product on and consumption Government can use Income Tax as a powerful fiscal weapon to plan and direct the economy, by so doing steep booms and deep economic recessions can be avoided. Income Tax can be used in shaping the economic growth and development of the country. This paper contains primary and secondary sourced materials, such as laws, statutes, and other resource materials. This paper revealed that the objectives of tax incentives are to encourage foreign and domestic investment towards rapid industrialization and creation of investment opportunities to entrepreneurs self-reliance in local production of essential goods, to provide more employment opportunities for the general populace and by relieving the society of some social associated problems of mass unemployment to be self-reliant as possible towards political stability. It is recommended that important consideration must be given to planning of services and investment by harmonizing them with development strategy and changing economic structure. The Government can use powerful fiscal weapons to plan and direct the economy. The Government can use income taxation to provide effective and flexible instrument for the day to day management of the economy or to achieve specific economic objectives. For examples tax can be used to direct private investment in line with national needs and practices.