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| Chapters: 1-5
| Pages: 61
THE ROLE OF PERSONAL INCOME TAX ON THE ECONOMIC GROWTH IN NIGERIA
ABSTRACT
This study examines the role of personal income tax on the economic growth of Nigeria. the objective of the study was to determine how tax income affects economic growth in Nigeria. To achieve this objective, relevant secondary data from the period of 2000-2012 on personal income tax were collected from the Central Bank of Nigeria (CBN) statistical bulletin. The data collected for the study were analyzed using the ordinary least square (OLS) method of regression using SPSS to explore the relationship between the GDP (the dependent variable) and the PIT, TTR and TGOv Exp (the independent variables) head over the period, which where considered as the model.
The result shows that there is a significant positively relationship between the dependent variable (GDP) and the independent variable (PIT, TTR, GovExp). The model indicates that the variables as a group explains economic growth and development of Nigeria. It was gathered that personal income tax is generally effective in the growth and development of Nigeria as it is one of the source of revenue to the federal, state and local government. It is recommended that well equipped database on tax payers should be established by the federal state and local government with the aim of identifying all possible source of income to tax payer for tax purposes.
1.1 STATEMENT OF PROBLEM
It is the duty of the government of any country to provide its citizens with those basic amenities that will make life enjoyable to them. This is because individual cannot single handedly provides amenities themselves. The provision of these basic amenities can only be possible through payment of taxes by the citizen.
There have been a heart provoking outary by various state government in Nigeria over their poor financial base. This situation is becoming even more compounded by the obvious dividing feature of our oil economy. Inspite of the broadness and the comprehensive nature of our tax system, tax avoidance and evasion are on the increase. The ugly development has placed most state government in a situation where they cannot cope with their civic responsibilities to their citizens, hence a compelling need to put an end to this unwhole some circumstance in Nigeria through proper problem identification.
1.2 OBJECTIVES OF THE STUDY
The specific objective of this study are stated below:
1.3 RESEARCH QUESTION
For the purpose of this study the following research questions have been formulated.
1.4 HYPOTHESIS
For the purpose of this study the following hypothesis have been formulated:
H1: There is significance relationship between personal income tax and economic growth in Nigeria.
H1: There is significant relationship between total tax revenue and economic growth in Nigeria.
H1: There is significant relationship between total tax revenue and government expenditure in Nigeria.
1.5 SCOPE OF THE STUDY
It is the intention of the researcher to investigate into the extent our tax system with emphasis on personal income tax has affected the economic growth of Nigeria. Also the personal income tax Amendment Act 2011 will also be attempted by the researcher.
This research work is to look into the period from 2000-2012. Also the research work would cover forms on taxes and the personal income tax administration in Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
The importance of the study is throwing more light on the role of personal income tax on the economic growth in Nigeria. Findings from the research will enable the following group of people benefit the following:
ABSTRACT
This study examines the role of personal income tax on the economic growth of Nigeria. the objective of the study was to determine how tax income affects economic growth in Nigeria. To achieve this objective, relevant secondary data from the period of 2000-2012 on personal income tax were collected from the Central Bank of Nigeria (CBN) statistical bulletin. The data collected for the study were analyzed using the ordinary least square (OLS) method of regression using SPSS to explore the relationship between the GDP (the dependent variable) and the PIT, TTR and TGOv Exp (the independent variables) head over the period, which where considered as the model.
The result shows that there is a significant positively relationship between the dependent variable (GDP) and the independent variable (PIT, TTR, GovExp). The model indicates that the variables as a group explains economic growth and development of Nigeria. It was gathered that personal income tax is generally effective in the growth and development of Nigeria as it is one of the source of revenue to the federal, state and local government. It is recommended that well equipped database on tax payers should be established by the federal state and local government with the aim of identifying all possible source of income to tax payer for tax purposes.
1.1 STATEMENT OF PROBLEM
It is the duty of the government of any country to provide its citizens with those basic amenities that will make life enjoyable to them. This is because individual cannot single handedly provides amenities themselves. The provision of these basic amenities can only be possible through payment of taxes by the citizen.
There have been a heart provoking outary by various state government in Nigeria over their poor financial base. This situation is becoming even more compounded by the obvious dividing feature of our oil economy. Inspite of the broadness and the comprehensive nature of our tax system, tax avoidance and evasion are on the increase. The ugly development has placed most state government in a situation where they cannot cope with their civic responsibilities to their citizens, hence a compelling need to put an end to this unwhole some circumstance in Nigeria through proper problem identification.
1.2 OBJECTIVES OF THE STUDY
The specific objective of this study are stated below:
1.3 RESEARCH QUESTION
For the purpose of this study the following research questions have been formulated.
1.4 HYPOTHESIS
For the purpose of this study the following hypothesis have been formulated:
H1: There is significance relationship between personal income tax and economic growth in Nigeria.
H1: There is significant relationship between total tax revenue and economic growth in Nigeria.
H1: There is significant relationship between total tax revenue and government expenditure in Nigeria.
1.5 SCOPE OF THE STUDY
It is the intention of the researcher to investigate into the extent our tax system with emphasis on personal income tax has affected the economic growth of Nigeria. Also the personal income tax Amendment Act 2011 will also be attempted by the researcher.
This research work is to look into the period from 2000-2012. Also the research work would cover forms on taxes and the personal income tax administration in Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
The importance of the study is throwing more light on the role of personal income tax on the economic growth in Nigeria. Findings from the research will enable the following group of people benefit the following:
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