TAX AS A MEANS OF INCOME REDISTRIBUTION IN NIGERIA
Tax as a means of income redistribution in Nigeria according to the universal library in volume seven said that income redistribution is the proportion of the national income going to w age earners it shows the individual differences in the accrued income.
Tax enables us to know the taxable income due to us this study is mainly carried out to determine if or not we are over charged or not and to ascertain the effect of taxation as a means of redistribution in Nigeria. It enables the reader to know how, why an when tax came into existence an also what tax is all about.
In chapter I is the introduction, background of the study, statement of the problem, objective of the study, significant of the study, scope an limitation of the study, Definition of terms and references. Chapter II shows the overview of the types of tax, agencies responsible for taxation &References. Chapter III is the research metrology, method of data collection, secondary data, method of investigations, location of data an tools of analysis.
Chapter IV is the summary of findings, general benefit of taxation & references. Chapter V, conclusion, recommendation & bibliography.
TABLE OF CONTENT
1.1 BACKGROUND OF THE STUDY
1.2 STATEMENT OF THE PROBLEM
1.3 OBJECTIVES OF THE STUDY
1.4 RESEARCH QUESTION
1.5 SIGNIFICANCE OF THE STUDY
1.6 SCOPE AN LIMITATION OF THE STUDY
1.7 DEFINITION OF TERMS
2.1 AN OVERVIEW OF THE TYPES OF TAX
2.2 AGENCIES RESPONSIBLE FOR TAXATION
3.1 RESEARCH MYTHOLOGY
3.2 METHODS OF DATA COLLECTION
3.3 SECONDARY DATA
3.4 METHOD OF INVESTIGATION
3.5 LOCATION OF DATA
3.6 TOOLS OF ANALYSIS
4.1 SUMMARY OF FINDINGS
4.2 GENERAL BENEFITS OF TAXATION
CHAPTER ONE1.1 INTRODUCTIONS
As everybody has own aim to acquire income and show how he or she has income over the other, the emergency of tax began to arose as a way whereby some part of the individual, companies and co-operate organization an taxed an little portion refrained to the cost of the stages.
Thus by the process of taxing or cutting some be of income form an individual, companies or co-operate organization, the remaining are t he accused to know how individual is
Although in Nigeria, the origin of tax can be dated back to pre-colonial era. Meanwhile in the period of time tax collection and administration, which usually carried out, by the Emir, chief and their appointed agents. The system at that time was highly functional for that time, it was extremely arbitrary.
By that time, tax collection developed from the northern state of the country and finally proceed to the southern state.
On advert of the British about 1900, the administration of tax was affected through several amending ordinances (non Acts and Decrees), which principally entrusted the responsibility of collection of taxes on local authorities.
Income tax was introduced for the first time in the northern part of Nigeria in 1904 by law Lugard By virtue of an amended ordinance passed in 1918, Income t ax also introduced in some part of western Nigeria. Income tax was not introduced in the Eastern part of the Nigeria until late 1920’s one to the strong resentment to the composition that part of the country.
However what can be regarded as the modern form of income taxation in our country came into existence in 1940 under the direct taxation ordnance No 29 of 1943.
In 1943, by ordinance personal income tax the modern an progressive form and could be saw to have been introduced in Nigeria, ever through the administration and collection of tax was still share between the British and the local authorities.
1.2 STATEMENT OF PROBLEM
Some arrears where tax study may not help to show any changes or where it might be disrupted that is the practice includes areas where there are non-comphance and they include.
(a) Falsification of finical records
(b) Failure to file income tax returns
(c) On reported Income
(d) Failure to state all benefits in kinds
(e) Failure to emt sources decisions.
(f) Claiming improper dedication, tax credit or expenses.
1.3 OBJECTIVE OF THE STUDY
Since tax was all bout income or revenue greater for the government it becomes obvious and very necessary that tax should be studies for many benefited reasons, which include
(1) To find out how tax can reduce inequality of income
(2) To know if consumption of commodities regards as harmful in tax
(3) To know how tax serves as sources of revenue for government
(4) To show how tax export promotion strategies
(5) To find out how tax is used to control inflation
(6) To find out how tax is used to protect the infant industries
1.4 RESEARCH QUESTION
(1) How can tax reduce Inequality of Income
(2) How would consumption of commodity be regarded as harmful in tax
(3) How can tax serves as sources of revenue for government
(4) How would tax export promotion strategies
(5) How can tax be used to control inflation
(6) How can tax be used to protect the infant industries.
1.4 SIGNIFICANCE OF THE STUDY
This research project will be of immense benefits to the academic world in the sense that it will stimulate future research.
It will equally be of immense benefit to the federal government of Nigeria on the scene that the activities of taxation in Nigeria
The federal government appreciates it also because they use it to control inflection in an economy.
When there is inflation in the economy government can tax away the excess income in the lands of the society and thereby reduce the aggregate demand which eventually losing the price spiral down in the economy.
They also uses tax in order to stimulate the economy towards growth and development. This could be achieved through tax incentives to investors, tax concessions tax holidays to new firms or investors that could lend to industrialization and development of the economy. This issues of tax helps the federal government to meet up with its social, economic and political obligations eg building schools, hospitals, good roads, protect the populace from internal and external aggression etc. from internal an external aggression etc. Government uses tax instrument to raise revenue.
However, this study would be extended to powers of local government and the federal government on the ways by which they use tax to carry out their job on the distribution in Nigeria.
1.6 DEFINITION OF TERMS
Tax being income or revenue collection generates for government, this will be necessary and obvious that t ax should be studied for some reasons like.
1. PROGRESSIVE TAX
A tax is said to be progressive, if its rate increase as the size of income or stock of wealth which is being taxed the burden of a progressive income tax falls on those with higher incomes. E.G Mr. X earns N20, 000 and pays N2, 000 as tax per anum 10% & Mr. Y earns N80, 000 and pays N16, 00 as tax a year. His rate of tax is 20%. In though is situation, income axis progressive, it increases with the rate of income.
11 DIRECT TAX
It means a tax borne to paid by a person or whom it is legally imposed. The burden is expected to fall upon the person who actually pays it. That the impact and the incidence of taxation fall on one and the same person e.g. personal income tax, capital gain tax, petroleum profit tax. Etc.
111 REGRESSIVE TAX
Tax is said to be regressive it takes a smaller part of income as income increase. That is as income increases the rate of tale decreases. For example. Mr. A earns N10, 000 and Mr. B earns N40, 000 per annum. In a year. Mr. A pays N1, 00 as tax at a rate 10% while Mr. B pays N20 at a rate of 5%. This is a regressive situation.
IV INCOME TAX
This means a tax on income of a person or company or any organization income.