ABSTRACT

The Nigeria tax system has undergone significant changes in the recent times. The tax laws are being reviewed with the aim of repelling obsolete provisions and simplifying the main ones. Under current Nigerian law, tax revenue is enforced by the 3 tiers ol Government. which Federal. State, and Local Government with each having its sphere clearly spelt out in the Taxes and Levies Act, 1998. The whole of tax revenue is to generate revenue to advance the welfare of the people of a nation with focus on promoting infrastructures and development of a country through the provision of basic amenities for improved public services via proper administrative system, and structures. Tax revenue plays a crucial role in promoting infrastructure and development. Through tax revenue, government ensures that resources are channeled towards important projects in the society, while giving succor to the weak. The role of tax revenue in promoting economic activity and growth may not be felt if poorly administered. This calls for a need for proper examination of the relationship between revenue generated from taxes and the economy, to enable proper pol icy formulation and strategy towards its efficiency. According to Olashore(1999),the Nigerian economy has remained in a deep slumber with macroeconomic indicators reflecting an economy in dire need of rejuvenation, revival and indeed radical reform. Also, in the View of Oni (1998), tax administration needs to be revamped and refunds of taxes as well as duty drawbacks administration are inefficient.