ABSTRACT

 Taxes have been one of the tool for revenue generation and a significant tool in Fiscal policy in Nigeria. The overriding preoccupation of this study is to examine the factors that have been critical in determining the savings and investment pattern in Abia State, Nigeria. Taxation being a too use to monitor and influence the nation’s economy, it was inherent to use taxes as the independent variable to regress domestic savings and investment. Specifically, the study aims at determining whether tax affects the saving patterns ofindividuals, corporate bodies and institutions. In an attempt to do this, past literatures were reviewed, theories of taxation, savings and investment were examined. The study also examined tax administration in Abia State, and the composition of tax authorities at different levels. In order to carry out the research, the researcher adopted a sample size of 255 from a population of 700 which was captured from three cities of Aba, Umuahia and Ohafia representing the three senatorial zones of Abia State. Questionnaires were distributed to collect primary data for the study; which were analyzed with simple percentages. The hypotheses stated in the research were tested with correlation model. After the study, it was observed that tax policies have significant effect on domestic savings and investment pattern in Abia State. Thus, the researcher recommended that tax policies in Abia State should be implemented so as to grow domestic savings and investment in Abia State in order to have a stable and favorable economy.