EVALUATION OF TAXATION AS A SOURCE OF GOVERNMENT REVENUE; A CASE STUDY OF THE STATE BOARD OF INTERNAL REVENUE

CHAPTER ONE

1.0     INTRODUCTION

          Taxation can simply be seen as a compulsory  transfer or payment (or occasionally of goods and service) from private individuals, Institutions or groups to the government, Anyanwu, (1998). It is a burden which every citizen must bear to sustain his or her government.

          Another perspective of the definition has it that, taxation is the compulsory payment levied by the government on its citizens to generate revenue and control economic activities, hence it is backed by law. Taxation has not only influenced the economy, it has also become an important instrument of economic policy.

          Thus its importance lies primarily in  its ability to raise capital formation of the public sector for the development and growth of the economy. Its regulatory roles of consumption and hence of stabilization as well as of income redistribution are accordingly derivatives of the primary to provide service for the community, whether to the individuals  families or the wider community. Additional to their service role, however, most public service organizations under the  State Government can that including seeking a profit or contribution on that trade, and or they can make charge for some or all of their services. But since profit is not the main essence of these (corporations) establishments, taxation happens to be one of the avenue through which these corporations make up for administration expenses and revenue.

          The government has certain functions to perform for the  benefits of those, it governs. The scope of these functions will depend, among other things, on the particular and economic orientation of the members of a particular society at a given point in time, Their needs and aspirations and their willingness  and ability to pay tax. As the functions of the government increase, the revenue of financing those functions must necessarily increase.

          Nigeria operates a  federal system of government which allows the division of powers among different (3) tiers of government which includes the federal, State and Local Government.

          In all the ability to differentiate or divide the taxing power of these tiers seems simple enough when it comes to the terms of starting the various types of taxes that are available within this various tiers.