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The bulk majority of the tax evasion and tax avoidance is caused by inadequate machineries and lack of skilled personal in administrative tax bodies as well as the legal framework upon which their relationship rest. This result in many problems of the tax collection in Nigeria. It is in this regard that the topic of this dissertation entitled “A Legal Examination of the Role of Taxation in Revenue Generation and Economic Development in Nigeria” was chosen. This study is to present, explore and analyze the nature and extent of tax legal provisions relating to the role of taxation in revenue generation and economic development in Nigeria. It will also present how they are maintained, practiced, adhered to and suggest some ways and means of improving the present state of affairs. The study is composed of five Chapters. Thus, Chapter one dealt with the General Introduction, Background, Statement of Problems, Aims and Objectives, Scope of the study, Significance of the study, Research Methodology, Literature Review and Organizational layout. Chapter two discussed on Examination of Taxing power in the Federal Republic of Nigeria under the 1999 Constitution of the Federal Republic of Nigeria (As amended), and the brief history of Income Taxation in Nigeria. Chapter three is the bedrock of the whole work that discussed the role of taxation in the economic development of Nigeria with its legal perspectives. Chapter four discussed on significance of Taxation in Nigeria; Nigerian Economic Situation and Tax as incentive for economic growth. Chapter five which is the last chapter discussed on Summery, Findings and Recommendations that my hopefully be help in solving the problems.



1.1 Background ofthe Study
Tax is one of the sources of revenue for the government.1 This is so because for the achievement of aims, goals and objectives, an organization will need to have enough funds at its disposal. This importance assumes an accelerated dimension in the face of the present economic recession in Nigeria.2
Therefore, tax system is one of the most powerful means available to the government to stimulate and guide its economic and social development. In the life of any nation, taxation is an indispensable tool employed by the government for the promotion of their overall economic and social objectives. The crucial role that taxation plays in the development of Nigerian economy cannot be over emphasized.3 Though revenue generation seems to be the primary goal of the government when it levies taxes, however it not the only purpose of the government in levying taxes, but produces economic need for the government.
For instance, when investment, production, consumption and so on, begin to rise or fall dangerously, a change in the tax structure can stop or reverse the undesired trend. It is in recognition of this crucial role of taxation in a country‟s economy that the United State Supreme Court has this to say in the case of Nichols v. Ames4 Taxation is one great power upon which the National fabric is base. It is necessary to the existence and prosperity of a nation. It is in the air she breathes. For natural men, it is not only the power to destroy… Taxation provides the main impetus for formulation and implementation of an optimal fiscal strategic policy. To this end state governments in Nigeria play and carry out important roles and responsibilities, for examples apart from Local governments State governments are the second tier of governments closest to the people. These governments coupled with other responsibilities they are saddled with they provides the people with social services, and to do this effectively they need to generate enough funds. Therefore, to generate enough funds for any government in order to discharge its responsibilities effectively it is a matter of concern to everyone. The accessibility of the income of the tax payer from all sources, including balancing charge, less allowable deductions for expenses, capital allowances and losses are the income of the taxpayers. There is the unreported case of a Professor who earned N3,000 from a part-time state appointment. He transferred the income tohis University faculty to be used for the advancement of education. The income had never come to his hands. The revenue successfully contended that the income was that of Professor and not that of the recipient of a gift, since the recipient had not earned it. The Professor may plead that this is good example of a legal tax avoidance to benefit mankind, and that an American case of the RITES Foundation may be cited as a precedent. The point here is that it must be proved conclusively that the income is that of the taxpayers.

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