Abstract:
The contribution of taxation to any economy globally cannot be overemphasized. Apart from the revenue function it performs for the government, it is also used to assist the national government to achieve the country’s macro-economic objectives in the areas of fiscal and monetary policies. Over the years, it has been observed that a substantial part of revenue generated in Nigeria is from taxes, yet the role of taxation in promoting socio-economic life of its citizens is not felt, mainly because of feasible evidences which cannot be seen nor perceived by the citizens in terms of infrastructure and basic amenities. Past documentations have revealed that taxation in developed nations have high impact on its socio-economic development which clearly seen by the amenities provided by such nations. Thus the main objective of this study is to explore the relationship between taxation in Nigeria and her socio-economic development. Data was collected with the aid of a structured questionnaire administered to four hundred (400) respondents randomly selected from three geopolitical zones in Nigeria. While secondary data was obtained from National bureau of statistics (NBS), central bank of Nigeria annual reports, statistical bulletin and statement of account. Time series data were applied in carrying out this research work. Multiple Linear Regression analysis and one way ANOVA was used to analyze the secondary and primary data respectively. The findings reveal that petroleum profit tax and value added tax have a positive impact on Nigeria’s economic growth and also revenue generation while custom excise and duties and company income tax impacted negatively but overall, a significant relationship between taxation and economic growth and also revenue generation exists. The findings also reveal that taxation has a significant effect on wealth distribution, inflation control in Nigeria. Study also discovered that the legal system of tax has a significant effect on taxpayers’ confidence. The utilization of the generated revenue from taxes calls for serious concern, and requires a special attention of policy makers, non-compliance with tax laws on the part of the tax payers is a hindrance and ineffective administration of tax has given enough loop holes for tax evasion, the consequence of which is poor revenue. We recommend among others that only skilled and professionals and trustworthy hands are responsible for tax administration and the general public should be educated right from the grass root on the importance of taxes to the entire nation.
