Abstract
Underdevelopment in Nigeria was attributed to the governments’ inability to invest in infrastructure, social inclusion, creation of jobs and youth empowerment, and improved the economy’s human capacity base. Therefore, this study examines Nigeria’s tax structure and economic development from the standpoint of infrastructural deficiencies. This study’s population consisted of 4,200 tax practitioners, senior management staff of the Federal Inland Revenue Service in Lagos State. Simultaneously, Taro Yamane’s formula was used to determine the sample size of 365. Cronbach Alpha reliability coefficients take values between 0.864 and 0.952, thus confirming the reliability of data used. The study employed a survey research design using a structured questionnaire administered to senior tax practitioners and senior staff of the Federal Inland Revenue Service. A total of 85% of the questionnaire administered were retrieved while descriptive and inferential statistics were used for the data analysis. The study found that the tax structure had a significant positive effect on infrastructure in Nigeria. The study recommended that investors critically and objectively study and understand the tax base dynamics and tax rates as they affect their taxable income from their investments.
Highlights
1.1 The Study BackgroundOver the years, economic development has gained prominence in tax revenue generation among the world’s nations
Taci and Gerxhaliu (2018) made additional emphasis on the economic nexus between economic growth and economic development, that while economic growth measures an increase in the real gross domestic product, that measures the total volume of goods and services produced in an economy economic development looks at a broader range of statistics than just GDP per capita
2.3 Tax Rate In Nigeria, most tax rates are published by the tax authorities; and institutions are mandated by the tax authorities to deduct at source and remit; withholding taxes are deducted at source in respect of companies as contained in section 78,79,80, and 81 of CITA Cap C21 LFN 2004 and provisions are dealing with dividends, rent, interest, royalties, commission, consultancy and professional services, technical services, directors emolument, etc. which has a tax rate of 10% while building construction
Summary
Economic development has gained prominence in tax revenue generation among the world’s nations. One of the problems of under economic development in Nigeria was attributed to the governments’ inability to invest in infrastructures, social inclusion, creation of jobs and youth empowerment, and improving the economy’s human capacity base (Babatunde, Ibukun & Oyeyemi, 2017). They maintained that there had never been any concerted effort and sincerity of purpose by the governments in improving human capital, investing in infrastructure, improving the business environment, and the inability to promote the needed economic environment for economic development. They maintained that there had never been any concerted effort and sincerity of purpose by the governments in improving human capital, investing in infrastructure, improving the business environment, and the inability to promote the needed economic environment for economic development. Folayan and Adeniyi (2018) submitted that the rightful position of Nigeria in the world ranking among the developing economies had not improved as expected as a result of the instability of the macroeconomic environment, low achievement in agricultural and perennial food insecurity, challenges of ensuring energy sufficiency, inadequate improvement of transportation infrastructure, the inability of driving industrialization focusing on Small and Medium Scale Enterprises
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