THE IMPACT OF TAX INCENTIVES ON ECONOMIC AND INDUSTRIAL DEVELOPMENT (A CASE STUDY OF BOARD OF ISNTERNAL REVENUE ENUGU STATE)

CHAPTER ONE

INTRODUCTION

          The mode by which economic and industries can be effectively and efficiently developed have a problem.  As a result, government charges less tax in order to encourage investments and activities in those areas which helps to improve the production capabilities, active economic growth as well as allocation of resources in social desirable manner.

          Tax incentive is the use of government spending and tax policies to influence the level of national income.  Taxation itself is the process or mean by which communities or group are made to contribute part of their income for purpose of administration of the society.

          This measure will encourages new enterprises to spring up.  Thereby reducing profit task which encourages production to curb unemployment.  Government should provide employment opportunities,  to improve our economy.

          The government infrastructure facilities such as roads, water supply, electricity hospital etc more reallocate resources to the public sector charging mix input.  By borrowing rather than taxing, the federal government has a better chance of expanding investment spending which is essential to enlarge our production possibilities and attaining increase in standard of living.

          In order hand, these incentive can be targeted on low income earners. This will normally increase their saving which is necessary for higher investment.

Tax incentive also create employment opportunities people which help to fight depression, inflation thereby increasing distribution of income and wealth.

1.1     STATEMENT OF THE PROBLEM

          This impact of tax incentive on economic and industrial development using Enugu state as a case study although there are many advantages got were tax incentives are use for economy and industrial development most task experts, consultants individuals and economic analyst ignored or criticized tax incentives  because of the following.

1.     the impact of incentives are not effective in the economy

2.     The exemption privilege not granted to all firms in an industry which place some companies at a competitive disadvantage

3.     Many management of firms, companies lack awareness of the incentive

4.     The incentive granted are not adequate to the development and growth of industry

5.     Unwillingness of some companies and individuals to claim the incentive.  This is because they do not understand the role.